THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


SELECTED  CASES 


LAW  OF  TAXATION 


BDITED  BY 


FRANK  J.    GOODNOW 

fW 

EATON  PROTMSOR  or  ADMINISTRATIYB  LAW  IN  COLUMBIA  UKIYUMXY 


COPYRIGHT   1905 

BT 

CALLAQHAN  AND  COMPANY. 


. 


PREFACE 


The  editor  has  in  this  book  attempted  to  collect  cases  which  will 
illustrate  the  fundamental  principles  of  the  law  governing  the  assess- 
ment and  collection  of  taxes.  As  the  law  upon  this  subject  is  to  so 
high  a  degree  the  result  of  the  action  of  legislative  bodies,  and  is  in  a 
continual  state  of  change,  it  has  been  deemed  inexpedient  to  endeavor 
to  set  forth  the  positive  law  of  any  particular  state.  One  of  the  neces- 
sary consequences  of  this  method  of  treatment  has  been  the  inclusion 
of  a  comparatively  large  number  of  cases  involving  constitutional 
questions.  Constitutional  questions  in  taxation  are,  however,  of  such 
supreme  importance  in  this  country  that  it  has  been  thought  that  the 
great  amount  of  space  devoted  to  them  will  add  to  rather  than  detract 
from  the  value  of  the  book. 

As  this  collection  of  cases  has  been  made  with  the  needs  of  the 
student  of  the  subject  primarily  in  view,  it  has  been  deemed  advisable 
to  follow,  in  the  order  in  which  the  cases  chosen  have  been  arranged, 
the  presentation  of  the  law  to  be  found  in  the  standard  text  on  the 
subject,  viz.,  "A  Treatise  on  the  Law  of  Taxation  etc."  by  the  late 
Judge  Cooley.  The  adoption  of  this  method  of  arrangement  has  in- 
volved a  treatment  of  the  subject  based  on  the  most  important  opera- 
tions necessary  for  the  assessment  and  collection  of  the  taxes  rather 
than  upon  the  different  kinds  of  taxes.  The  index  by  which  the  cases 
are  accompanied  will,  however,  refer  the  enquirer  to  the  cases  treating 
of  the  particular  kind  of  tax  as  to  which  he  desires  information,  and 
the  attempt  has  been  made  to  select  cases  which  treat  to  some  degree 
at  least  of  almost  every  kind  of  tax  which  it  is  customary  for  either 
the  federal  government  or  that  of  the  states,  or  any  of  their  local  or- 
ganizations to  levy. 

Although  no  attempt  has  been  made  to  accompany  the  cases  selected 
by  exhaustive  notes,  brief  annotations  have  been  appended  to  the  cases 
where  the  editor  has  deemed  it  necessary. 

Finally,  it  is  to  be  noted  that  portions  of  the  statements  of  facts 
and  of  the  opinions  have  been  omitted  wherever  such  omission  has 
been  felt  to  be  either  necessary  to  confine  the  application  of  the  case 
to  the  point  of  law  sought  to  be  illustrated,  or  to  be  possible  with  due 
regard  to  the  desire  to  have  the  case  comprehensible  to  the  student. 

FRANK  J.  GOODNOW. 

Columbia  University,  August,  1905. 

iii 


TABLE  OF   CONTENTS 


CHAPTER  I. 
THE  NATURE  OF  TAXES. 

FAOB. 
I.    TAXES  NOT  DEBTS.  1 

Peirce  v.  Boston,  3  Metcalf  (Mass.)  520. 
Shaw  v.  Peckett,  26  Vermont  482. 

II.    SUIT  FOR  COLLECTION.  § 

City  of  Camden  v.  Allen,  2  Dutcher  (N.  J.)  398. 
Meredith  Y.  United  States,  13  Peters  486. 

CHAPTER  IT. 

THE  NATURE  OF  THE  POWER  TO  TAX. 
I.    THE  TAXING  POWER  A  LEGISLATIVE  POWER.  10 

People  v.  Coleman,  4  Cal.  46. 
People  v.  Mayor,  4  New  York  419. 
Veazie  Bank  v.  Fenno,  8  Wallace  (U.  S.)  533. 
Rees  v.  Watertown,  19  Wallace  (U.  S.)  107. 

II.  DELEGATION  OF  THE  TAXING  POWER. 

1.  To   Private   Corporations.  27 
Cypress  Pond  &c.  Company  v.  Hooper,  2  Metcalf e  (Ky.)  350. 

2.  To  Municipal  Corporations.  80 
Ex  parte  The  City  Council  of  Montgomery,  64  Ala.  463. 

Baldwin  v.  City  Council,  53  Alabama  437. 
State  v.  Sickles,  4  Zabriskie  (N.  J.)  125. 
Holt's  Appeal,  5  Rhode  Island  603. 
Williamson  v.  New  Jersey,  130  U.  S.  189. 
State  v.  City  of  New  Orleans,  37  La.  Ann.  16. 

III.  ALIENATION  OF  THE  TAXING  POWBB. 

1.    Statutory  Exemptions  from  Taxation.  43 

Christ  Church  v.  County  of  Philadelphia,  24  Howard  (U.  S.)  300. 
New  Jersey  v.  Wilson,  7  Cranch  (U.  S.)  164. 


Vi  CONTENTS. 

, "" 

PAGE. 

2.  Exemptions  Contained  in  Charters.  48 
Home  of  the  Friendless  v.  Rouse,  8  Wallace  (U.  S.)  430. 
Covington  v.  Kentucky,  173  United  States  231. 

CHAPTER  III. 

LIMITATIONS  OF  THE  TAXING  POWER  BY  PARAMOUNT 

LAW. 

I.     EFFECT  OF  THEORY  OF  FEDERAL  GOVERNMENT. 

1.    General  Principle.  56 

M'Culloch  v.  Maryland,  4  Wheaton  316. 
Carpenter  v.  Snelling,  97  Massachusetts  452. 
Collector  v.  Day,  11  Wallace  (U.  S.)  113. 

2.     Taxation  of  Government  Bonds.  64 

Weston  v.  Charleston,  2  Peters  449. 
Bank  of  Commerce  v.  New  York  City,  2  Black  620. 
Home  Insurance  Co.  v.  New  York,  134  United  States  594. 
Plummer  v.  Coler,  178  United  States  114. 
Pollock  v.  Farmers  &c.  Company,  157  United  States  429. 

3.  Taxation  of  Government  Property.  85 
Van  Brocklin  v.  Tennessee,  117  United  States  151. 

United  States  v.  Baltimore  &  Ohio  Railroad  Company,  17  Wallace 

(U.  S.)   322. 

II.  TAXES  ON  COMMERCE. 

1.     State   Taxation  of  Interstate  and  Foreign  Commerce.     93 
Robbins  v.  Shelby  County  Taxing  District,  120  United  States  489. 
Case  of  the  State  Freight  Tax,  15  Wallace  (U.  S.)  232. 
Leloup  v.  Mobile,  127  United  States  640. 
Pickard  v.  Pullman  &c.  Co.,  117  United  States  34. 
Osborne  v.  Florida,  164  United  States  650. 
Brown  v.  Houston,  114  United  States  622. 
Western  Union  Telegraph  Company  v.  Borough  of  New  Hope,  187 

United  States  419. 

State  Tax  on  Railway  Gross  Receipts,  15  Wallace  (U.  S.)  284. 
Philadelphia  &  Southern  Co.  v.  Pennsylvania,  122  U.  S.  326. 
Ratterman  v.  Western  Union  Telegraph  Co.,  127  United  States  411. 

2.    State  Taxation  of  Imports.  133 

Brown  v.  Maryland,  12  Wheaton  419. 
Cook  v.  Pennsylvania,  97  United  States  566. 


CONTENTS.  vil 

PAGE. 

Waring  v.  Mayor,  8  Wallace   (U.  S.)    110: 

Woodruff  v.  Parham,  8  Wallace  (U.  S.)  123. 

People  v.  Compagnie  Generale  &c.,  107  United  States  59. 

3.    Tonnage  Taxes.  165 

State  Tonnage  Tax  Cases,  12  Wallace  (U.  S.)  204. 

4.     Taxes  on  Exports.  173 

Fairbank  v.  United  States,  181  United  States  283. 
III.     DUE  PROCESS  OF  LAW,  ETC. 

1.     Hearing  Necessary.  179 

County  of  San  Mateo  v.  Southern  Pacific  Railroad  Company,  13  Fed. 
Rep.  722. 

2.     Vested  Rights.  184 

Orr  v.  Oilman,  183  United  States  278. 

3.     Equal  Protection  of  the  Laws.  189 

County  of  Santa  Clara  v.  Southern  Pac.  R.  R.  Co.,  18  Fed.  Rep.  385. 
Magoun  v.  Illinois  Trust  &c.  Bank,  170  United  States  283. 

IV.    DIRECT  TAXES.  202 

Springer  v.  United  States,  102  United  States  586. 
Pollock  v.  Farmers  &c.  Company,  158  United  States  601. 

V.    UNIFORMITY  THROUGHOUT  UNITED  STATES.  214 

Knowlton  v.  Moore,  178  United  States  41. 
Dooley  v.  United  States,  183  United  States  151. 

CHAPTER  IV. 
THE  PURPOSES  FOR  WHICH  TAXES  MAY  BE  LAID.  231 

Loan  Association  v.  Topeka,  20  Wallace  (U.  S.)  655. 

Lowell  v.  City  of  Boston,  111  Massachusetts  454. 

United  States  v.  Realty  Company,  163  United  States  427. 

CHAPTER  V. 
THE  PURPOSE  MUST  PERTAIN  TO  THE  DISTRICT  TAXED. 

I.    DISCRETION  OF  LEGISLATURE.  251 

Gordon  v.  Comes,  47  New  York  608. 
Thomas  v.  Leland,  24  Wendell  (X.  Y.)  65. 

II.  JURISDICTION  OVER  PROPERTY.  257 

St.  Louis  v.  The  Ferry  Company.  11  Wallace  (U.  S.)  423. 
Savings  &c.  Society  v.  Multnomah  Co.,  169  United  States  421. 


yiii  ,  CONTENTS. 

PAOB. 

New  Orleans  v.  Stempel,  175  United  States  309. 
Kirtland  v.  Hotchkiss,  100  United  States  491. 
Miller  v.  Pennsylvania,  111  Pa.  St.  321. 
Estate  of  Handley,  181  Pa.  St.  339. 
Matter  of  Swift,  137  New  York  77. 
State  v.  Dalrymple,  70  Maryland  294. 

CHAPTER  VI. 
EQUALITY  AND  UNIFORMITY  OF  TAXATION. 

I.     INDIVIDUAL  DISCRIMINATION.  282 

State  .v.  Township  Committee,  7  Vroom  (N.  J.)  66. 

Oilman  v.  Sheboygan,  2  Black  510. 

Matter  of  Pell,  171  New  York  48. 

Supervisors  v.  C.  B,  &  Q.  R.  R.  Co.,  44  Illinois  229. 

II.    POWER  OF  EXEMPTION.  299 

California  v.  McCreery,  34  California  432. 
People  v.  Campbell,  93  New  York  196. 
Matter  of  Mayor  &c.,  11  Johnson  77. 

CHAPTER  VII. 
OFFICIAL  ACTION  IN  MATTERS  OF  TAXATION.     304 

Smith  v.  Messer,  17  New  Hampshire  420. 
Snell  v.  Fort  Dodge,  45  Iowa  564. 

CHAPTER  VIII. 
CONSTRUCTION  OF  TAX  LAWS.  307 

Cornwall  v.  Todd,  38  Connecticut  443. 
People  v.  Supervisors,  51  New  York  401. 
Torrey  v.  Inhabitants,  21  Pickering  64. 
Price  v.  Mott,  52  Pa.  St.  315. 
Drexel  v.  Commonwealth,  46  Pa.  St.  31. 

CHAPTER  IX. 
CURING  DEFECTS  IN  TAX  PROCEEDINGS.          320 

McCready  v.  Sexton,  29  Iowa  356. 
Matter  of  Sackett  Street,  74  New  York  95. 
Parish  v.  Golden,  35  New  York  462. 
Gibson  v.  Bailey,  9  New  Hampshire  1H8. 


CONTENTS.  ix 

CHAPTER  X. 

LISTING  OF  PERSONS  AND  VALUATION  OF  ESTATES  FOK 

TAXATION. 

PAGE. 

I.    THE  NATURE  OF  A»  ASSESSMENT.  334 

Matter  of  McPherson,  104  New  York  306. 
City  of  Tampa  v.  Kaunitz,  39  Florida  683. 
Felsenthal  v.  Johnson,  104  Illinois  21. 
Matter  of  Cager,  111  New  York  343. 
Mygatt  v.  Washburn,  15  New  York  316. 
People  v.  Forrest,  96  New  York  544. 
Commonwealth  v.  Freedley's  Executors,  21  Pt.  St.  33. 

II.    TAX  DOMICIL.  351 

Boreland  v.  Boston,  132  Massachusetts  89. 
Pennsylvania  v.  Ravenel,  21  Howard  (U.  S.)  104, 
Bell  v.  Pierce,  51  New  York  12. 

III.    LIABILITY  OF  CORPORATIONS.  359 

Middletown  Ferry  Co.  v.  Middletown,  40  Connecticut  65. 
Western  Transportation  Co.  v.  Scheu,  19  New  York  408. 
People  v.  Wemple,  117  New  York  136. 
People  v.  Equitable  Trust  Co.,  96  New  York  387. 
Commonwealth  v.  N.  Y.,  L.  E.  &  W.  R.  R.  Co.,  129  Pa.  Si  463. 
People  v.  Horn  Silver  Mining  Co.  105  New  York  76. 
Horn  Silver  Mining  Co.  v.  New  York,  143  United  State*  305. 

IV.    SITUS  OF  PROPERTY.  379 

People  v.  Commissioners,  23  New  York  224. 
People  v.  Smith,  88  New  York  576. 

Pullman  Palace  Car  Co.  v.  Pennsylvania,  141  United  States  18. 
Adams  Express  Company  v.  Ohio  State  Auditor,  165  U.  S.  194. 
Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196. 

V.    TAXATION  OF  CORPORATE  STOCK.  410 

Belo  v.  Commissioners,  82  North  Carolina  415. 
Dyer  v.  Osborne,  11  Rhode  Island  321. 
State  v.  Branin,  3  Zabriskie  (X.  J.)  484. 

Tappan  v.  Merchants  National  Rank.  19  Wallace  (U.  S.)  490. 
Pelton  v.  National  Bank,  101  United  States  143. 

VI.    ASSESSMENT  TO  OWNER.  427 

State  v.  Williston,  ?0  Wisconsin  240. 
Cruger  v.  Dougherty,  43  New  York  107. 


X,  CONTENTS. 

PAGE. 

Van  Voorhis  v.  Budd,  39  Barbour  (N.  Y.)  479. 
Tyler  v.  Inhabitants,  6  Metcalf  (Mass.)  470. 

VII.    ASSESSMENT  or  SEPARATE  PARCELS.  436 

County  Commissioners  v.  Union  Mining  Company,  61  Maryland  547. 
Brown  v.  Hays,  66  Pa.  St.  229. 
Woodside  v.  Wilson,  32  Pa.  St.  52.     . 
Boeworth  v.  Danzien,  25  California  297. 

VIII.     METHOD  OF  VALUATION.  447 

Hersey  v.  Board  &c.,  37  Wisconsin  75. 
State  v.  Platt,  24  N.  J.  L.  108. 
People  v.  Coleman,  126  New  York  433. 
People  v.  Barker,  146  New  York  304. 

IX.    EQUALIZATION.  465 

People  v.  Salomon,  46  Illinois  333. 
People  v.  Sacramento  Co.,  59  Cal.  321. 

CHAPTER  XI. 
THE  COLLECTION  OF  THE  TAX. 

I.    DISTRESS  AND  SALE.  474 

McMillen  v.  Anderson,  95  United  States  37. 
Donald  v.  McKinnon,  17  Florida  746. 
Daniels  v.  Nelson,  41  Vermont  161. 
Sheldon  v.  Van  Buskirk,  2  New  York  473. 
Brackett  v.  Vining,  49  Maine  356. 

II.    LIENS  AND  FORFEITURES..  482 

Cone  v.  Wilson,  14  Indiana  465. 
Henderson's  Distilled  Spirits,  14  Wallace  (U.  S.)  44. 
Albany  Brewing  Co.  v.  Meriden,  48  Connecticut  243. 
King  v.  Mullins,  171  United  States  404. 

III.    ARREST  AND  IMPRISONMENT.  497 

Palmer  v.  McMahon,  133  United  States  660. 
Commonwealth  v.  Byrne,  20  Grattan  (Va.)  165. 

CHAPTER  XII. 
.THE  SALE  OF  LAND  FOR  UNPAID  TAXES. 

I.    WHEN  LAND  MAY  BE  SOLD.  507 

Brown  v.  Veazie,  25  Maine  359. 
Slater  v.  Maxwell.  6  Wallace  (U.  S.)  268. 
Parker  v.  Overman,  18  Howard  (U.  S.)  137. 


CONTENTS.  li 

PAGE. 

II.    REDEMPTION.  514 

Gault's  Appeal,  33  Pa.  St.  94. 

Bennett  v.  Hunter,  9  Wallace  (U.  S.)  326. 

III.    EFFECT  OF  TAX  DEED.  522 

Turner  v.  Smith,  14  Wallace  (U.  S.)  553. 
Williams  v.  Payton's  Lessee,  4  Wheaton  77. 

CHAPTER  XIII. 
TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

I.    POLICE  AND  TAXING  POWER.  529 

Youngblood  v.  Sexton,  32  Michigan  406. 

II.    WHAT  Is  A  PRIVILEGE.  534 

Portland  Bank  v.  Apthorp,  12  Massachusetts  252. 
State  v.  Schlier,  3  Heiskell  (Tenn.)  281. 
Collector  v.  Beggs,  17  Wallace  (U.  S.)  182. 

III.    LOCAL  TAXATION.  543 

Burlington  v.  Putnam  Insurance  Company,  31  Iowa  102. 
Mayor  v.  Second  Avenue  R.  R.  Co.,  32  New  York  261. 
Newton  v.  Atchinson,  31  Kansas  151. 
Ould  v.  Richmond,  23  Grattan  (Va.)  464. 

IV.    REVOCATION  OF  TAX  LICENSE.  562 

Metropolitan  Board  v.  Barrie,  34  New  York  657. 
People  v.  Board,  59  New  York  92. 

CHAPTER  XIV. 
TAXATION  BY  SPECIAL  ASSESSMENTS. 

I.    LEGISLATIVE  DISCRETION.  566 

Litchfield  v.  Vernon,  41  New  York  123. 
Hammett  v.  Philadelphia,  65  Pa.  St.  146. 
State  v.  Newark,  3  Dutcher  (N.  J.)  186. 

II.    METHODS  OF  ASSESSMENT.  577 

French  v.  Barber  Asphalt.  &c.  Co.,  181  United  States  324. 
Washington  Avenue,  69  Pa.  St.  352. 

III.    POWERS  OF  LOCAL  AUTHORITIES.  587 

Wright  v.  Chicago,  20  Illinois  252. 
Philadelphia  v.  Pennsylvania  Hospital,  143  Pa.  St.  367. 
McChesney  v.  Hyde  Park,  151  Illinois  634. 
McChesney  v.  Chicago,  171  Illinois  253. 


Xii  CONTENTS. 

F1.01. 

IV.    REGULARITY  OF  PROCEEDINGS.  595 

Merritt  v.  Kewanee,  175  Illinois  537. 

Whiteford  Township  v.  Probate  Judge,  53  Michigan  130. 

Partridge  v.  Lucas,  99  California  519. 

CHAPTER  XV. 
ENFORCING  OFFICIAL  DUTY.  603 

People  v.  Campbell,  93  New  York  196. 

People  v.  Salomon,  46  Illinois  333. 

People  v.  Supervisors,  51  New  York  401. 

Rees  v.  Watertown,  19  Wallace  (U.  S.)  107. 

State  v.  Xew  Orleans,  37  La.  Ann.  16. 

State  v.  Township  Committee,  7  Vroom  (N.  J.  L.)  66. 

State  v.  Williston,  20  Wisconsin  240. 

CHAPTER  XVI. 

THE  REMEDIES  FOR  WRONGFUL  ACTION  IN  TAX  PRO- 
CEEDINGS. 

I.    REFUNDING  TAXES.  604 

Cary  v.  Curtis,  3  Howard  (U.  S.)  236. 
De  Lima  v.  Bidwell,  182  United  States  1. 
Wright  v.  Blakeslee,  101  United  States  175. 
Dooley  v.  United  States,  182  United  States  222. 

II.    REMEDIES  AGAINST  ASSESSMENTS. 

I.     Certivrari.  628 

People  v.  Trustees,  48  New  York  391. 
People  v.  Carter,  109  New  York  576. 

II.    STATUTORY  APPEAL.  630 

Manchester  Mills  v.  Manchester,  57  New  Hampshire  309. 
Passavant  v.  United  States,  148  United    States,   214. 
State  of  Nevada  v.  Central  Pac.  R.  R.  Co.,  7  Nevada  99. 

III.     EQUITABLE  REMEDIES   (INJUNCTION).  640 

Dows  v.  Chicago,  11  Wallace  (U.  S.)  10a 
Sage  v.  Fifield,  68  Wisconsin  546. 
Snyder  v.  Marks,  109  United  States  189. 

IV.     ACTIONS  AGAINST  TAX  OFFICMS.  649 

Brackett  v.  Vining,  49  Maine  356. 
Gordon  v.  Comes,  47  New  York  ti08. 


CONTENTS.  xiii 

1MB. 
Mygatt  v.  Washburn,  15  New  York  316. 

Price  v.  Mott,  52  Pa.  St.  315. 

Shaw  v.  Peckett,  26  Vermont  482 

Sheldon  v.  Van  Buskirk,  2  New  York  473. 

Van  Voorhis  v.  Budd,  39  Barbour  (N.  Y.)  479. 

V.    REPLEVIN.  649 

Carpenter  v.  Snelling,  97  Massachusetts  452. 
Daniels  v.  Nelson,  41  Vermont  161. 

VI.     HABEAS  CORPUS.  649 

Ex  parte  City  Council  of  Montgomery,  64  Ala.  463. 
Commonwealth  v.  Byrne,  20  Grattan   (Va.)    165. 

VII.    ACTION  TO  RECOVER  POSSESSION  OF  PROPERTY  SOLD  FOR  NON- 
PAYMENT OF  TAXES.  649 

Bennett  v.  Hunter,  9  Wallace  (TL  S.)  326. 
Brown  v.  Hays,  66  Pa.  St.  229. 
Brown  v.  Veazie,  25  Maine  359. 
Covington  v.  Kentucky,  173  United  States  231. 
Cruger  v.  Dougherty,  43  New  York  107. 
Donald  v.  McKinnon,  17  Florida  746. 
King  v.  Mullins,  171  United  States  404. 
Smith  v.  Messer,  17  New  Hampshire  420. 
Williams  v.  Payton's  Lessee,  4  Wheaton  77. 
Woodside  v.  Wilson,  32  Pa.  St.  52. 

VIII.    PROHIBITION.  649 

People  v.  Board,  59  New  York  92. 
Weston  v.  Charleston,  2  Peters  449. 


TABLE   OF   CASES   REPORTED 


[REFERENCES  ARE  TO  PAGES.] 

Adams  Express  Co.  v.  Ohio  State  Auditor,  165  United  States,  194; 

17  S.  Ct.  Rep.  305 394 

Albany  Brewing  Company  v.  Meriden,  48  Connecticut  243 489 

Baldwin  v.  City  Council,  53  Alabama  437 33 

Bank  of  Commerce  v.  New  York  City,  2  Black  620 66 

Bell  v.  Pierce,  51  New  York  12 356 

Belo  v.  Commissioners,  82  North  Carolina  415 410 

Bennett  v.  Hunter,  9  Wallace  (U.  S.)  326 516 

Boreland  v.  Boston,  132  Massachusetts  89 351 

Bosworth  v.  Danzien,  25  California  297 444 

Brackett  v.  Vining,  49  Maine  356 481 

Brown  v.  Hays,  66  Pa.  St.  229 440 

Brown  v.  Houston,  114  United  States  622 113 

Brown  v.   Maryland,   12   Wheaton   419 133 

Brown  v.  Veazie,  25  Maine  359 507 

Burlington  v.  Putnam  Insurance  Company,  31  Iowa  102 .• 543 

Cager,  Matter  of,  111  New  York  343 ;    18  N.  E.  Rep.  866 343 

California  v.  McCreery,  34  California  432 299 

Carpenter  v.  Snelling,  97  Massachusetts  452 60 

Gary  v.  Curtis,  3  Howard   (U.  S.)   236 604 

Christ  Church  v.  County  of  Philadelphia,  24  Howard  (U.  S.)  300....  43 

City  Council  of  Montgomery,  Ex  parte,  64  Alabama  463 30 

City  of  Camden  v.  Allen,  2  Butcher  (N.  J.)   398 5 

City  of  Newton  v.  Atchinson,  31  Kansas,  151;    1  Pac.  Rep.  288 549 

City  of  Tampa  v.  Kaunitz,  39  Florida  683 337 

Collector  v.  Beggs,  17  Wallace  (U.  S.)  182 539 

Collector  v.  Day,  11  Wallace  (U.  S.)   113 61 

Commonwealth  v.  Byrne,  20  Grattan    (Va.)    165 499 

Commonwealth  v.  Freedley's  Executors,  21  Pa.  St.  33 349 

Commonwealth  v.  N.  Y.,  L.  E.    &   W.    R.    R.    Co.,    129    Pa.    St  463; 

18  At.  Rep.  412 371 

Cone  v.  Wilson,   14   Indiana  465 482 

Cook  v.  Pennsylvania,  97  United  States  566 145 

Cornwall  v.  Todd,  38  Connecticut  443 307 

County  Commissioners  v.  Union  Mining  Co.,  61  Maryland  547 436 

County  of  San  Mateo  v.  So.  Pac.  R.  R.  Co.,  13  Fed.  Rep.  722 179 

County  of  Santa  Clara  v.  So.  Pac.  R.  R.  Co.,  18  Fed.  Rep.  385 189 

Covington  v.  Kentucky,  173  United  States  231;    19  S.  Ct.  Rep.  383..  51 

XV 


*V1  TABLE  OF  CASES  REPORTED. 

[REFERENCES  ARE  TO  PAGES.] 

Cruger  r.  Dougherty,  43  New  York  107 429 

Cypress  Pond  &c.  Co.  v.  Hooper,  2  Metcalfe  (K'y)  350 27 

Daniels  v.  Nelson,  41  Vermont  161 478 

De  Lima  v.  Bidwell,  182  United  States  1;  21  S.  Ct.  Rep.  743 611 

Donald  v.  McKinmm,  17  Florida  746 477 

Dooley  v.  United  States,  182  United  States  222;  21  S.  Ct.  Rep.  762 619 

Dooley  v.  United  States,  183  United  States  151;  22  S.  Ct  Rep.  62 228 

Dows  v.  Chicago,  11  Wallace  (U.  S.)  108 642 

Drexel  v.  Commonwealth,  46  Pa.  St.  31 318 

Dyer  v.  Osborne,  11  Rhode  Island  321 413 

Fairbank  v.  United  States,  181  United  States  283;  21  S.  Ct.  Rep.  648.  173 

Felsenthal  v.  Johnson,  104  Illinois  21 339 

Freight  Tax,  Case  of  the  State,  15  Wallace  (U.  S.)  232 98 

French  v.  Barber  Asphalt  Co.,  181  United  States  324;  21  S.  Ct.  Rep. 

625 577 

Gault's  Appeal,  33  Pa.  St  94 514 

Gibson  v.  Bailey,  9  New  Hampshire  168 331 

Oilman  v.  Sheboygan,  2  Black  510 284 

Gloucester  Ferry  Co.  v.  Pennsylvania,  114  United  States  196;  5  S. 

Ct.  Rep.  826 401 

Gordon  v.  Cornes,  47  New  York  608 251 

Hammett  v.  Philadelphia,  65  Pa.  St.  146 569 

Handley,  Estate  of,  181  Pa.  St.  339 ;  37  At.  Rep.  587 273 

Henderson's  Distilled  Spirits,  14  Wallace  (U.  S.)  44 484 

Hersey  v.  Board,  37  Wisconsin  75 447 

Holt's  Appeal,  5  Rhode  Island  603 36 

Home  Insurance  Company  v.  New  York,  134  United  States  594; 

10  S.  Ct.  Rep.  593 69 

Home  of  the  Friendless  v.  Rouse,  8  Wallace  (U.  S.)  430 48 

Horn  Silver  Mining  Co.  v.  New  York,  143  United  States  305;  12  S. 

Ct.  Rep.  403 376 

King  v.  Mullins,  171  United  States  404;  18  S.  Ct.  Rep.  925 492 

Kirtland  v.  Hotchkiss,  100  United  States  491 268 

Knowlton  v.  Moore,  178  United  States  41;  20  S.  Ct.  Rep.  747. 214 

Leloup  v.  Port  of  Mobile,  127  United  States  640;  8  S.  Ct.  Rep.  1380. .  104 

Litchfleld  v.  Vernon,  41  New  York  123 566 

Loan  Association  v.  Topeka,  20  Wallace  (U.  S.)  655 231 

Lowell  v.  City  of  Boston,  111  Massachusetts  454 239 

Magoun  v.  Illinois  Trust  &c.  Bank,  170  United  States  283;  18  S.  Ct. 

Rep.  594 196 

Manchester  Mills  v.  Manchester,  57  New  Hampshire  309 630 

Maryland  v.  Dalrymple,  70  Maryland  294 278 

Mayor  &c.,  Matter  of,  11  Johnson  77 302 

Mayor  v.  Second  Avenue  R.  R.  Co.,  32  New  York  261 546 

McChesney  v.  Chicago,  171  Illinois  253;  49  N.  E.  Rep.  548 594 

McChesney  v.  Hyde  Park,  151  Illinois  634;  37  N.  E.  Rep.  858 592 

McCready  v.  Sexton,  29  Iowa  356 320 

M'Culloch  v.  Maryland,  4  Wheaton  316 56 

-McMillen  v.  Anderson,  95  United  States  37 474 


TABLE  OF  CASES  REPORTED.  XV11 

[REFERENCES  ARE  TO  PAGES.] 

McPherson,  Matter  of,  104  New  York  306;    10  N.  E.  Rep.  685 334 

Meredith  v.  United  States,  13  Peters  486 7 

Merritt  v.  Kewanee,  175  Illinois  537;    51  N.  E.  Rep.  867 595 

Metropolitan  Board  y.  Barrie,  34  New  York  657 562 

Middletown  Ferry  Co.  v.  Middletown,  40  Connecticut  65 359 

Miller  v.  Pennsylvania,  111  Pa.  St.  321;    2  At.  Rep.  492 272 

Mygatt  v.  Washburn,  15  New  York  316 345 

New  Jersey  v.  Wilson,  7  Cranch   (U.  S.)  164 45 

New  Orleans  v.  Stempel,  175  United  States  309;    20  S.  Ct  Rep.  110. .  265 

Newton  v.  Atchinson,  31  Kansas  151 ;    1  Pac.  Rep.  288 549 

Orr  v.  Oilman,  183  United  States  278;    22  S.  Ct.  Rep.  213 184 

Osborne  v.  Florida,  164  United  States  650;    17  S.  Ct.  Rep.  214 110 

Ould  v.  Richmond,  23  Grattan   (Va.)   464 555 

Palmer  v.  McMahon,  133  United  States  660;    10  S.  Ct  Rep.  234 497 

Parish  v.  Golden,  35  New  York  462 328 

Parker  v.  Overman,  18  Howard  (U.  S.)  137 611 

Partridge  v.  Lucas,  99  California  519;    33  Pac.  Rep.  1082 600 

Passavant  v.  United  States,  148  United  States  214;    13  S.  Ct.  Rep.  572.  634 

Peirce  v.  Boston,  3  Metcalfe  (Mass.)   520 1 

Pell,  Matter  of,  171  New  York  48 ;    63  N.  E.  Rep.  789 289 

Pelton  v.  National  Bank,  101  United  States  143 422 

Pennsylvania  v.  Ravenel,  21  Howard   (U.  S  )   104 354 

People  v.  Barker,  146  New  York  304;    40  N.  E.  Rep.  966 460 

People  v.  Board,  59  New  York,  92 564 

People  v.  Campbell,  93  New  York  196 300 

People  v.  Carter,  109  New  York  576;    17  N.  E.  Rep.  222 $2$ 

People  v.  Coleman,  126  New  York  433;    27  N.  E.  Rep.  818 452 

People  v.  Coleman,  4  California  46 10 

People  v.  Commissioners,  23   New  York  224 J79 

People  v.  Compagnie  G6n6rale  Ac..  107  United  States  59;     2  S.  Ct. 

Rep.  87 1C2 

People  v.  Equitable  Trust  Company,  96  New  York  387 368 

People  v.  Forrest,   96   New  York   544 347 

People  v.  Horn  Silver  Mining  Co.,  105  New  York  76;    11  N.  E.  Rep. 

155 375 

People  v.  Mayor,  4  New  York  419 13 

People  v.  Sacramento  Co.,  59  California  321 471 

People  v.  Salomon,  46  Illinois  333 455 

People  v.  Smith,  88  New  York  576 337 

People  v.  Supervisors,  51  New  York  401 310 

People  v.  Trustees,   48   New  York  391 .  .  622 

People  v.  Wemple,  117  New  York  136;    22  N.  E.  Rep.  1046 364 

Philadelphia  v.  Pennsylvania  Hospital,  143  Pa.  St  367;    22  At.  Rep. 

144 599 

Philadelphia  &c.   Steamship  Co.  v.  Pennsylvania,  122  United  States 

326;    7  S.  Ct.  Rep.  1118 12« 

Pickard  v.  Pullman  &c.,  Co.,  117  United  States  34;  6  Sup.  Ct.  Rep.  635.  108 

Plummer  v.  Coler,  178  United  States  115;   20  S.  Ct.  Rep.  829 75 

Pollock  v.  Farmers  &c.  Co.,  157  United  States  429;    15  S.  Ct.  Rep.  673.  83 


xviii  TABLE  OF  CASES  REPORTED. 

[REFERENCES  ARE  TO  PAGES.] 

Pollock  v.  Farmers  Ac.  Co.,  158  United  States  601;    15  S.  Ct  Rep.  912.  208 

Portland   Bank  v.  Apthorp,  12  Massachusetts  252 534 

Price  v.  Mott,  52  Pa.  St.  315 

Pullman's  Palace  Car  Co.  v.  Pennsylvania,  141  United  States  18;    11 

S.  Ct.  Rep.  876 389 

Railway  Gross  Receipts,  State  Tax  on,  15  Wallace  (U.  S.)  284 123 

Ratterman  v.  Western  Union  Tel.  Co.,  127  United  States  411;   8  S. 

Ct.  Rep.  1127 130 

Rees  v.  Watertown,  19  Wallace  (U.  S.)  107 23 

Robbins  v.  Shelby  County  Taxing  District,   120    United    States  489; 

7  S.  Ct.  Rep.  592 93 

Sackett  Street,  Matter  of,  74  New  York  95 326 

Sage  v.  Fifield,  68  Wisconsin  546;   32  N.  W.  Rep.  629 644 

Savings  &c.  Society  v.  Multnomah  Co.,    169    United    States  421;  18 

S.  Ct.  Rep.  392 259 

Shaw  v.  Peckett,  26  Vermont  482 3 

Sheldon  v.  Van  Buskirk,  2  New  York  473 480 

Slater  v.  Maxwell,  6  Wallace  (U.  S.)  268 509 

Smith  v.  Messer,  17  New  Hampshire  420 304 

Snell  v.  Fort  Dodge,  45  Iowa  564 305 

Snyder  v.  Marks,  109  United  States  189;    3  S.  Ct.  Rep.  157 645 

Springer  v.  United  States,  102  United  States  586 202 

State  v.  Branin,  3  Zabriskie  (N.  J.)  484 417 

State  v.  City  of  Newark,  3  Dutcher  (N.  J.  L.)  186 573 

State  v.  City  of  New  Orleans,  37  La.  Ann.  16 40 

State  v.  Dalrymple,  70  Maryland  294 ;    17  At.  Rep.  82 278 

State  v.  Platt,  24  N.  J.  L.  108 450 

State  v.  Schlier,  3  Heiskell   (Tenn.)   281 537 

State  v.  Sickles,  4  Zabriskie  (N.  J.)  125 34 

State  v.  Township  Committee,  7  Vroom  (N.  J.)  66 282 

State  v.  Williston,  20  Wisconsin  240 427 

State  Freight  Tax,  15  Wallace  (U.  S.)  232 98 

State  Tax  on  Railway  Gross  Receipts,  15  Wallace  (U.  S.)  284 123 

State  Tonnage  Tax  Cases,  12  Wallace  (U.  S.)  204 165 

State  of  Nevada  v.  Central  Pacific  R.  R.  Co.,  7  Nevada  99 640 

St.  Louis  v.  The  Ferry  Company,  11  Wallace  (U.  S.)  423 257 

Supervisors  v.  C.,  B.  &  Q.  R.  R.  Co.,  44  Illinois  229 293 

Swift,  Matter  of,  137  New  York  77;    32  N.  E.  Rep.  1096 275 

Tappan  v.  Merchants'  National  Bank,  19  Wallace  (U.  S.)  490 ....  418 

Thomas  v.  Leland,  24  Wendell  (N.  Y.)  65 255 

Tonnage  Tax  Cases,  State,  12  Wallace  (U.  S.)  204 165 

Torrey  v.  Inhabitants,  21  Pickering  64 314 

Turner  v.  Smith,  14  Wallace  (U.  S.)  553 522 

Tyler  v.  Inhabitants,  6  Metcalf  (Mass.)  470 435 

United  States  v.  B.  &  O.  Railroad  Company,  17  Wallace  (U.  S.)  322. .  89 
United  States  v.  Realty  Company,  163   United   States   427;    16  S.  Ct. 

Rep.  1120 243 

Van  Brocklin  v.  Tennessee,  117  United  States  151;    6  S.  Ct.  Rep.  670.  85 

Van  Voorhis  v.  Budd,  39  Barbour  (N.  Y.)  479 433 


TABLE  OF  CASES  REPORTED.  XIX 

[REFERENCES  ARE  TO  PAGES.] 

Veazie  Bank  v.  Fenno,  8  Wallace  (D.  S.)  533 20 

Waring  v.  Mayor,  8  Wallace  (U.  S.)  110 150 

Washington  Avenue,  69  Pa.  St.  352 581 

Western  Transportation  Co.  v.  Scheu,  19  New  York  408 361 

Western  Union  Telegraph  Co.  v.  Borough  of  New  Hope,  187  United 

States  419;  23  S.  Ct.  Rep.  204 , 120 

Weston  v.  Charleston,  2  Peters  449 64 

Whiteford  Township  v.  Probate  Judge,  53  Michigan  130;  18  N.  E. 

Rep.  593 597 

Williams  v.  Payton's  Lessee,  4  Wheaton  77 526 

Williamson  v.  New  Jersey,  130  United  States  189;  9  S.  Ct.  Rep.  453. .  38 

Woodruff  v.  Parham,  8  Wallace  (U.  S.)  123 153 

Woodside  v.  Wilson,  32  Pa.  St.  52 442 

Wright  v.  Blakeslee,  101  United  States  175 616 

Wright  v.  Chicago,  20  Illinois  252 587 

Youngblood  v.  Sexton,  32  Michigan  406 529 


CASES  ON  TAXATION 


CHAPTER  I. 
THE  NATURE  OF  TAXES. 

I.    TAXES  NOT  DEBTS. 
PEIECE  V,  CITY  OF  BOSTON. 

Supreme  Judicial  Court  of  Massachusetts.  March,  181$. 
SMetcalf520. 

HUBBABD,  J.  This  is  an  action  of  assumpsit,  brought  to  recover 
a  sum  of  money  due  to  the  plaintiff  for  his  services  as  a  teacher  in 
one  of  the  public  schools  in  the  city. 

The  right  of  the  plaintiff  to  a  judgment  in  his  favor  is  resisted, 
on  the  ground  that  his  demand,  before  the  commencement  of  the 
suit,  was  assigned  to  Joel  Peirce,  and  by  him  to  George  Odin,  for 
whose  benefit  the  action  is  brought ;  and  as  against  George  Odin,  and 
in  like  manner  as  if  he  were  the  plaintiff  in  the  suit,  the  defendants 
claim  to  set  off  certain  taxes  assessed  upon  the  said. George  Odin  and 
Reuben  Richards,  as  assignees  of  John  Odin,  by  the  proper  authori 
ties  of  the  city;  which  taxes  were  unpaid  at  the  time  when  thr 
services  were  rendered  by  the  plaintiff,  and  still  remain  unpaid. 

The  question  submitted  to  the  court  for  its  decision  is,  whether 
such  set-off  can  legally  be  made.  It  is  contended  by  the  defendants, 
that  these  are  mutual  demands  between  the  parties,  and  that,  by 
force  of  the  Rev.  Sts.  c.  96,  the  one  demand  may  be  set  off  against 
the  other,  and  judgment  be  given  for  the  balance.  Two  objections 
are  made  to  such  an  allowance;  the  one,  that  the  demand  of  the 
defendants  is  not  of  the  nature  contemplated  by  the  statute;  and 
the  other,  the  want  of  mutuality  in  the  parties. 

The  right  to  set  off  mutual  debts  has  long  been  recognized;,  but 
while  the  principle  has  been  acknowledged,  the  application  of  it  has 
been  restrained  within  circumscribed  limits.  The  St.  of  1784,  c.  28, 
§  12,  provided  that  in  actions  brought  to  recover  the  amount  of  an 
account,  or  for  services  rendered,  the  defendant  might  file  any 
account  he  had  against  the  plaintiff,  by  way  of  set-off  to  the  plain- 
1  1 


2  THE   NATURE   OF  TAXES. 

tiff's  demand.  By  St.  1793,  c.  75,  §  4,  the  remedy  was  extended,  so 
that  in  actions  brought  for  any  debt  upon  simple  contract  or  promise 
in  writing  not  under  seal,  defendants  might  file  in  set-off  any  de- 
mands against  plaintiffs  for  goods  delivered,  moneys  paid,  or  services 
done.  By  the  Rev.  Sts.  c.  96,  this  right  is  greatly  extended,  and  not 
only  accounts  and  claims  for  services,  or  for  goods  delivered,  may 
now  be  set  off,  but  also  demands  founded  on  judgments  and  on  con- 
tracts express  or  implied,  and  with  or  without  seal.  But  notwith- 
standing this  enlargement,  the  counsel  for  the  plaintiff  contends  that 
taxes,  assessed  upon  a  citizen,  are  neither  demands  founded  upon  a 
judgment,  nor  contracts  between  parties.  To  which  it  has  been 
ingeniously  replied  by  the  learned  counsel  for  the  city,  that  the 
assessment  of  taxes  is  a  judgment,  and  the  warrant  to  collect  them 
an  execution  founded  upon  such  judgment;  and  if  not  technically  a 
judgment  at  the  common  law,  yet  that  it  is  substantially  a  judg- 
ment, within  the  intent  and  meaning  of  the  statute.  But  we  are  of 
opinion,  that  this  position  cannot  be  successfully  maintained;  for 
though  the  right  of  set-off  is  enlarged,  the  language  of  the  statute 
is  still  precise  and  definite.  "No  demand  shall  be  set  off,  unless  it 
is  founded  upon  a  judgment  or  upon  a  contract;  but  the  contract 
may  be  either  express  or  implied,  and  with  or  without  a  seal."  Rev. 
Sts.  c.  96,  §2. 

Judgments  are  the  judicial  sentences  of  courts,  rendered  in  causes 
within  their  jurisdiction,  and  coming  legally  before  them,  and  are 
conclusive  in  all  cases  where  no  appeal  or  writ  of  error  lies,  and  can- 
not be  inquired  into  or  controverted. 

Taxes  are  those  proportional  and  reasonable  assessments  and  duties 
which  may,  by  virtue  of  the  constitution,  be  imposed  from  time  to 
time,  by  the  General  Court,  upon  the  inhabitants  of  the  Common- 
wealth, for  the  necessary  defense  and  support  of  the  government, 
and  for  the  protection  and  preservation  of  the  rights,  and  to  promote 
the  interests,  of  the  people.  They  do  not  partake  of  the  nature  of 
judgments.  The  imposition  and  collection  of  them  are  ministerial 
acts,  and  are  the  proper  subjects  of  inquiry,  as  to  the  manner  of 
their  assessment  and  the  mode  of  their  enforcement,  in  the  judicial 
forum;  and  for  the  collection  of  them  no  right  of  action  is  given 
(with  a  few  special  exceptions,  growing  out  of  the  death  of  parties, 
or  their  removal  out  of  the  collector's  precinct,  or  on  the  marriage  of 
females),  nor  can  they  be  turned  into  judgments.  Nor  are  taxes 
contracts  between  party  and  party,  either  express  or  implied;  but 
they  are  the  positive  acts  of  the  government  through  its  various 
agents,  binding  upon  the  inhabitants,  and  to  the  making  or  enforcing 


SHAW  V.  PECKETT  ET  AL.  3 

of  which  their  personal  consent,  individually,  is  not  required.  With 
this  view  of  the  statute,  we  are  of  the  opinion,  that  the  defendants' 
claim  is  not  one  which  can  be  set  off  under  any  of  its  provi- 
sions  

Conformably  to  the  agreement  of  the  parties,  an  assessor  will  be 
appointed  to  ascertain  the  amount  due  from  the  city,  unless  the 
parties  agree  upon  the  same. 

C&*   3  /  T . 


SHAW  V.  PECKETT  ET  AL. 

Supreme  Court  of  Vermont.     March,  1854-     26  Vermont  482. 

Trespass  for  false  imprisonment.  The  defendants  filed  a  special 
plea,  justifying  under  a  tax-bill  and  warrant.  The  plaintiff  replied 
and  set  forth  in  his  replication,  that  at  the  time  he  was  arrested  in 
August,  1851,  he  handed  to  the  defendant,  Gerry,  the  sum  of  $13.25,; 
which  was  the  amount  of  the  tax  and  costs  charged  by  said  defend- 
ant, and  asked  to  be  discharged;  but,  that  said  defendant  refused  to 
discharge  the  plaintiff  from  arrest,  and  for  a  long  time  kept  the 
plaintiff  under  arrest  and  imprisoned;  the  said  defendant  refusing 
to  set  the  plaintiff  at  liberty  until  he  paid  the  sum  of  $3.44,  claimed 
by  said  defendant  to  be  due  as  interest  on  the  said  taxes.  The 
defendants  rejoined  and  set  forth,  in  substance,  that  the  defendant, 
Gerry,  having  the  tax-bills  and  warrants,  on  the  first  day  of  June, 
18-46,  demanded  the  said  several  sums  in  said  lax-bills  due  against 
said  Shaw,  of  him,  the  said  Shaw;  that  he  refused  and  ever  since 
has  refused  and  neglected  to  pay,  until  the  7th  day  of  August,  1851, 
when  said  Shaw,  having  come  within  the  state  of  Vermont,  and  hav- 
ing no  goods  or  chattels  whereon  to  make  distress,  he  took  the  body 
of  the"  said  Shaw,  calling  to  his  aid  the  said  Peckett,  and  held  said 
Shaw  about  ten  hours,  until  he  paid  said  taxes,  costs  and  said  sum 
of  $3.44,  interest,  accruing  from  the  time  of  said  demand  to  the 
time  of  said  payment,  all  of  which  was  lawful,  &c. 

To  the  rejoinder  of  the  defendants,  the  plaintiff  demurred. 

The  County  Court;  January  Term,  1854 — Collamer,  J.,  pre- 
siding— rendered  judgment  that  the  rejoinder  is  sufficient,  and  that 
defendants  recover  their  costs. 

Exceptions  by  plaintiff. 

The  opinion  of  the  court  was  delivered  by 

ISHAM,  J.  The  judgment  of  the  county  court  in  this  case  must 
be  reversed.  The  arrest  of  which  the  plaintiff  complain*,  is  ad- 


4  THE   NATURE   OF  TAXES. 

mitted  by  defendant,  Gerry,  in  this  plea,  but  he  justifies  the  same 
as  collector  of  taxes.  From  the  facts  which  are  admitted  by  the 
demurrer,  it  appears  that  the  plaintiff  was  assessed,  in  the  sum  of 
$11.96,  as  specified  in  two  several  rate-bills  and  warrants,  which 
were  issued  and  placed  in  the  defendant's  hands,  as  collector;  and 
that  for  the  non-payment  of  these  two  taxes  the  arrest  was  made. 

The  legality  of  the  assessments,  rate-bills,  and  warrants,  are  not 
disputed,  but  it  is  insisted  that  the  arrest  was  illegal,  as  the  plain- 
tiff handed  to  defendant,  Gerry,  the  sum  of  $13.25,  being  the 
amount  of  the  taxes  and  costs,  and  requested  to  be  discharged,  which 
said  defendant  refused  to  do,  until  the  further  sum  of  $3.44  was 
paid  as  interest  on  the  taxes.  The  defendant  states  as  a  ground  for 
the  recovery  of  the  interest,  that  he  made  a  demand  for  the  payment 
of  the  taxes,  on  the  first  day  of  June,  1846,  and  that  the  plaintiff 
neglected  and  refused  to  pay  them,  until  the  time  of  the  arrest  in 
August,  1851.  The  demurrer  admits  that  the  arrest  was  made  for 
the  purpose  of  enforcing  the  payment  of  interest  merely.  The  ques- 
tion arises,  whether  for  that  purpose,  the  arrest  and  commitment 
was  legal. 

We  are  satisfied  that  the  collector  had  no  right  to  demand  and 
enforce  the  payment  of  that  interest.  The  taxes  were  assessed  in 
1846,  and  have  remained  in  the  hands  of  the  collector  until  their 
payment  in  1851.  The  plaintiff  was  absent  from  the  state  during 
all  the  period  from  the  time  of  the  assessment,  to  the  time  of  the 
arrest,  and  had  no  property  in  this  state,  known  to  the  collector, 
which  could  be  distrained.  There  is  no  provision  of  the  statute 
authorizing  him  to  collect  interest  on  taxes,  of  the  persons  against 
whom  they  are  assessed,  and  we  perceive  no  provision  which  sub- 
jects the  collector  to  the  payment  of  interest  under  such  circum- 
stances. The  assessment  of  taxes  does  not  create  a  debt  that  can  be 
enforced  by  suit,  or  upon  which  a  promise  to  pay  interest  can  be 
implied.  It  is  a  proceeding  purely  in  invitum.  The  existence  of  a 
contract,  either  express  or  implied,  is  the  ground  upon  which  inter- 
est is  generally  allowed 

The  justification  is  deemed  insufficient,  and  the  judgment  of  the 
county  court  must  be  reversed  and  the  case  remanded. 


CITY  OF  CAMDEN  V.  ALLEN  BT  AL.  5 

II.     SUITS  FOR  COLLECTION. 
CITY  OF  CAMDEN  V.  HENRY  ALLEN  ET  AL. 

Supreme  Court  of  New  Jersey.     November,  1857. 
2  Dutcher  398. 

THE  CHIEF  JUSTICE.  An  action  of  debt  was  brought  by  the 
plaintiff,  in  the  Camden  circuit,  for  the  recovery  of  taxes  assessed 
by  authority  of  the  city  of  Camden,  upon  real  estate  in  that  city, 
in  the  year  1853.  Upon  a  general  demurrer  to  the  declaration, 
the  caae  is  certified  to  this  court  for  its  advisory  opinion. 

The  only  question  presented  by  counsel,  upon  the  case  certified 
for  the  opinion  of  this  court,  is  whether  an  action  of  debt  will  lie 
to  recover  taxes  under  the  laws  of  this  state.  It  is  not  denied 
that  the  city  had  power  to  levy  the  tax  in  question,  and  that  the 
assessment  was  regularly  made.  The  payment  of  the  tax  may,  it 
is  conceded,  be  enforced  in  the  mpde  prescribed  by  the  statute 
but  may  resort  be  had  to  an  action  at  law  to  enforce  payment? 

A  tax,  in  its  essential  characteristics,  is  not  a  debt,  nor  in  the 
nature  of  a  debt.  A  tax  is  an  impost  levied  by  authority  of 
government,  upon  its  citizens  or  subjects,  for  the  support  of  the 
state.  It  is  not  founded  on  contract  or  agreement.  It  operates  in 
invitum.  Peirce  v.  Tie  City  of  Boston,  3  Mete.  520.  A  debt  is 
a  sum  of  money  due  by  certain  and  express  agreement.  It  origi- 
nates in,  and  is  founded  upon  contract  express  or  implied. 

A  debt  universally  bears  interest  from  the  time  it  is  due.  A 
tax  never  carries  interest.  No  instance,  it  is  believed,  can  be 
found  since  the  formation  of  the  government  where  a  claim  for 
interest  on  taxes  has  been  made  or  enforced. 

In  Shaw  v.  Peckett,  26  Verm.  482,  it  was  expressly  decided 
that  interest  could  not  be  collected  upon  a  tax,  and  that  it  could 
not  be  enforced  by  suit. 

Debt  is  the  subject  matter  of  set-off,  and  is  liable  to  set-off;  a 
tax  is  neither.  To  hold  that  a  tax  is  liable  to  set-off  would  be 
utterly  subversive  of  the  power  of  government  and  destructive  of 
the  very  end  of  taxation.  If  the  national  debt  of  Great  Britain 
were  distributed  among  one-half  or  three-fourths  of  its  taxpayers, 
could  they  set  off  such  debt,  if  past  maturity,  against  the  annual 
tax  assessed  against  them  for  the  support  of  government?  Or  can 
the  multitude  of  creditors  of  our  local  municipal  corporations  set- 


6  THE   XATUEE   OF   TAXES. 

off  the  debts  due  from  the  town  or  city  against  their  taxes?  The 
question  relates  not  to  the  technical  form  of  making  the  set-off; 
but,  as  a  matter  of  principle  and  sound  policy,  could  the  claim  be 
tolerated  ?  How  is  government  to  be  maintained  upon  such  theory  ? 
It  is  not  improbable  that  at  this  hour  many  of  our  municipal  cor- 
porations are  indebted  to  their  own  citizens,  in  amounts  far  ex- 
ceeding the  annual  tax  which,  by  their  charters,  they  are  authorized 
to  levy.  If  a  principle  so  clear  requires  an  authority  in  its  sup- 
port, it  will  be  found  in  Peirce  v.  The  City  of  Boston,  3  Mete. 
520. 

It  was  also  held,  in  the  case  just  cited,  that  taxes  do  not  partake 
of  the  nature  of  judgments;  that  no  right  of  action  is  given  for 
them,  except  in  certain  specified  cases,  and  that  they  cannot  be 
turned  into  judgments. 

There  is  in  fact  no  necessity,  nor  reason,  nor  ground  of  policy, 
for  converting  a  tax  into  a  debt,  and  bringing  an  action  for  it? 
recovery.  The  government  and  municipal  corporations  exercising 
the  functions  of  government  have  a  higher  and  better  remedy.  It 
is  a  claim  created  by  government,  through  the  action  of  its  own 
executive  officers,  having  all  the  efficacy  of  a  judgment,  creating 
a  lien  upon  property,  admitting  of  no  appeal,  except  to  its  own 
specially  constituted  agents,  nor  under  the  control  of  judicial 
tribunals,  subject  to  none  of  the  delays  incident  to  proceedings  in 
courts  of  law,  and  capable  of  being  enforced  by  process  more  sum- 
mary than  legal  execution.  On  the  other  hand,  to  permit  municipal 
corporations,  or  their  subordinate  officers,  at  pleasure  to  forego 
the  plain  and  simple  method  prescribed  by  statute  for  the  recovery 
of  taxes,  and  to  subject  the  taxpayer  to  the  vexation  and  costs  of 
legal  proceedings,  would  be  adding  a  wanton  and  intolerable  griev- 
ance to  a  burthen  already  sufficently  onerous. 

If,  indeed,  a  tax  should  be  imposed,  and  no  method  be  provided 
by  law  for  its  recovery,  a  resort  to  legal  proceedings  would  then 
be  a  matter  of  necessity.  By  the  fundamental  principle  of  the  law, 
there  must  be  a  redress  for  every  wrong,  a  method  of  recovery  for 
every  due.  In  the  cases  cited  upon  the  argument,  where  an  action 
of  debt  was  maintained,  in  Ohio  for  the  recovery  of  tax,  the  only 
points  discussed  or  decided  relate  to  the  legality  of  the  tax  itself. 
No  question  appears  to  have  been  raised  as  to  the  form  of  recovery. 
Ohio  v.  Hibbard,  3  Ohio  R.  63;  Ohio  v.  Gazlay,  5  Ohio  R.  14.  It 
may  be  presumed  that  the  statute  of  that  state  either  prescribed  no 
other  mode  of  recovery,  or  expressly  authorized  the  bringing  of  the 
action.  In  my  opinion,  the  declaration  contains  no  cause  of  action. 


MEREDITH  ET  AL.  V.  UNITED  STATES.      7 

The  circuit  court  should  be  advised  that  the  defendant  is  entitled 
to  judgment  upon  the  demurrer. 


MEREDITH  ET  AL.  V.  THE  UNITED  STATES. 

Supreme  Court  of  the  United  States.     January,  1839. 
13  Peters  486. 

Mr.  Justice  STORY  delivered  the  opinion  of  the  Court. 

This  is  a  writ  of  error  to  the  Circuit  Court  for  the  District  of 
Maryland.  The  original  action  was  assumpsit,  brought  by  the 
United  States  against  the  plaintiffs  in  error,  who  were  the  original 
defendants,  to  recover  from  them,  as  assignees  under  a  general  as- 
signment of  the  property  of  the  firm  of  Smith  and  Buchanan,  the 
amount  of  certain  duties  alleged  to  be  due  from  the  said  firm  upon 
certain  importations  in  the  brig  Unicorn  and  the  ship  Brazilian, 
out  of  the  funds  in  the  hands  of  the  assignees,  upon  the  ground  of 
an  asserted  right  of  priority  of  the  United  States  to  payment  out 
of  the  same  funds. 

At  the  trial,  upon  the  general  issue,  the  material  facts  appeared 
as  follows.  In  the  years  1818  and  1819  Smith  and  Buchanan,  and 
Hollins  and  M'Blair,  two  separate  commercial  firms  in  Baltimore, 
imported,  on  their  own  account  as  owners,  a  quantity  of  goods 
from  Calcutta  in  the  brig  Unicorn  and  ship  Brazilian  above  men- 
tioned, on  which  the  present  duties  were  claimed.  Smith  and 
Buchanan  were  the  importers  and  owners  of  two-thirds  of  the 
cargo  of  the  ship,  and  five-ninths  of  that  of  the  brig;  and  that 
proportion  went  to  their  possession  and  use.  The  remainder  of 
both  cargoes  belonged  to  Hollins  and  M'Blair.  The  entries  of  both 
cargoes  were  made  at  the  customhouse  at  Baltimore  by  John  S. 
Hollins,  one  of  the  firm  of  Hollins  and  M'Blair,  as  imported  in 
the  vessels,  respectively,  by  Hollins  and  M'Blair  and  Smith  and 
Buchanan;  and  Hollins  gave  bonds  for  the  duties  in  the  common 
form  in  his  own  name;  and  James  A.  Buchanan  of  the  firm  of 
Smith  and  Buchanan,  and  Lemuel  Taylor,  who  is  admitted  to  be 
a  mere  surety,  also  executed  the  same  bonds.  The  condition  of 
the  bonds  was  for  the  payment  of  the  duties  on  the  goods 
"entered  by  the  above  bounden  John  S.  Hollins,  for  Smith  and 
Buchanan,  and  Hollins  and  M'Blair,  as  imported"  in  the  ship 
and  brig  respectively.  Upon  these  bonds  the  United  States  after- 


8  THE  NATUHE   OF   TAXES. 

ward  instituted  actions  against  each  of  the  obligors,  and  recovered 
judgments  in  the  Circuit  Court  for  the  District  of  Maryland. 
These  judgments  have  been  revived  and  are  now  in  full  force  and 
unreversed.  Smith  and  Buchanan  became  insolvent;  and  after  the 
rendition  of  the  judgments,  Taylor  also  became  insolvent  under 
the  insolvent  laws  of  Maryland. 

The  first  question  is,  whether  Smith  and  Buchanan  were  ever 
personally  indebted  for  these  duties;  or,  in  other  words,  whether 
the  importers  of  goods  do,  in  virtue  of  the  importation  thereof, 
become  personally  indebted  to  the  United  States  for  the  duties  due 
thereon;  or  the  remedy  of  the  United  States  is  exclusively  confined 
to  the  lien  on  the  goods,  and  the  security  of  the  bond  given  for 
the  duties.  It  appears  to  us  clear  upon  principle,  as  well  as  upon 
the  obvious  import  of  the  provisions  of  the  various  acts  of  Congress 
on  this  subject,  that  the  duties  due  upon  all  goods  imported  con- 
stitute a  personal  debt  due  to  the  United  States  from  the  importer 
(and  the  consignee  for  this  purpose  is  treated  as  the  owner  and 
importer,)  independently  of  any  lien  on  the  goods,  and  any  bond 
given  for  the  duties.  The  language  of  the  duty  act  of  the  27th 
of  April,  1816,  ch.  107,  under  which  the  present  importations  were 
made,  declares  that  "there  shall  be  levied,  collected  and  paid," 
the  several  duties  prescribed  by  the  act  on  goods  imported  into 
the  United  States.  And  this  is  a  common  formulary  in  other  act-* 
laying  duties.  Now,  in  the  exposition  of  statutes  laying  duties,  it 
has  been  a  common  rule  of  interpretation  derived  from  the  prin- 
ciples of  the  common  law,  that  where  the  duty  is  charged  on  the 
goods,  the  meaning  is  that  it  is  a  personal  charge  on  the  owner  by 

reason  of  the  goods.     So  it  was  held  in  Attorney  General  v. , 

2  Anst.  R.  558,  where  a  duty  was  laid  on  wash  in  a  still;  and  it 
was  said  by  the  Court  that  where  duties  are  charged  on  anv  articles 
in  a  revenue  act,  the  word  "charged"  means  that  the  owner  shall 
be  debited  with  the  sum;  and  that  this  rule  prevailed  even  when 
the  article  was  actually  lost  or  destroyed  before  it  became  available 
to  the  owner.  Nor  is  there  anything  new  in  this  doctrine;  for 
it  has  long  been  held  that  in  all  such  cases  an  action  of  debt  lies 
in  favor  of  the  government  against  the  importer,  for  the  duties, 
whenever  by  accident,  mistake,  or  fraud,  no  duties,  or  short  duties 
have  been  paid. 

Upon  the  whole   we   are  of  opinion   that  the  judgment   of  the 
Circuit  Court  ought  to  be  affirmed 


MEREDITH  ET  AL.  V.  UNITED  STATES       9 

Suits  for  the  collection  of  taxes  are  very  frequently  found  in  the  books. 
They  are  allowed  either  as  result  of  the  application  of  the  principle  applied 
in  the  principal  case  or  because  specially  permitted  by  statute.  Cases  in  this 
collection  where  such  suits  have  been  allowed  are:  Boreland  v.  Boston,  132 
Mass.,  89 ;  City  of  Burlington  v.  Putnam  Ins.  Co.,  31  Iowa,  102 ;  County  of 
Santa  Clara  v.  Southern  Pac.  R.  R.  Co.,  18  Fed.  Rep.,  385 ;  Hammett  v.  Phila- 
delphia, 65  Pa.  St.,  146;  Home  Ins.  Co.  v.  New  York,  134  N.  S.,  594;  Part- 
ridge v.  Lucas.  99  Cal.,  519;  Pennsylvania  v.  Rancuel,  21  Howard  (U.  S.), 
104;  People  v.  Equitable  Trust  Co.,  96  N.  Y.,  387;  People  v.  Horn  Silver 
Mining  Co.,  105  N.  Y.,  76;  Philadelphia  v.  Pennsylvania  Hospital,  143  Pa. 
St.,  367;  State  v.  Central  Pacific  R.  R.  Co.,  7  Nevada,  99;  United  States  v. 
B.  &  O.  R.  R.  Co.,  17  Wallace,  322 ;  W.  U.  Tel.  Co.  v.  Borough  of  New  Hope, 
187  U.  S.,  419;  Woodruff  v.  Parham,  8  Wallace,  123. 


CHAPTER  II. 
THE  NATURE  OF  THE  POWER  TO  TAX. 

I.    THE  TAXING  POWER  A  LEGISLATIVE  POWER. 

PEOPLE  V.  COLEMAN  ET  AL. 
PEOPLE  V.  HUSSEY  ET  AL. 

Supreme  .Court  of  California.    January,  1854. 
4  California  46. 

The  complaints  in  these  several  cases,  against  the  several  de- 
fendants therein,  and  doing  business  in  the  city  of  San  Francisco,, 
by  designation  of  the  Attorney  General,  in  order  to  secure  an  im- 
partial trial,  were  filed  in  Contra  Costa  County,  in  the  ordinary 
form,  to  recover  the  penalties  imposed  by  Article  VI.  of  the 
Revenue  Act  of  May  18,  1853,  on  auctioneers,  for  selling  real  or 
personal  property  without  a  license 

The  defendants  demurred  to  the  several  complaints,  and  assigned 
for  error,  that  the  whole  revenue  act  of  1853,  and  particularly 
articles  VI.  and  VII.,  were  in  direct  conflict  with  the  Constitutions 
of  the  State  of  California  and  of  the  United  States,  and,  there- 
fore, null  and  void.  A  decision,  pro  forma,  was  entered  by  the 
court,  sustaining  the  demurrer  from  which  decision  appears  were 
prosecuted  in  this  court. 

Mr.  CH.  J.  MURRAY  delivered  the  opinion  of  the  court.  Mr.  J. 
HEYDENFELDT  concurred. 

This  appeal  is  prosecuted  from  a  pro  forma  decision  of  the  Dis- 
trict Court  of  Contra  Costa  County. 

The  suit  was  commenced  in  the  nature  of  a  prosecution,  to 
recover  the  penalty  for  a  violation  of  the  revenue  act  of  1853. 

The  defendants  demur  on  the  ground  that  the  act  in  question  is 
repugnant  to  the  Constitution  of  the  United  States,  and  the  Con- 
stitution of  the  State  of  California. 

To  enable  us  to  arrive  at  a  correct  determination  of  this  case, 
it  may  well  to  lay  down,  in  limine,  a  few  principles,  which,  we 
believe,  by  lon<r  acceptation,  have  become  universally  recognized  as 
truisms,  and  which  have  not,  within  our  knowledge,  been  doubted, 
except,  perhaps,  by  the  learned  counsel  for  the  respondents. 

10 


PEOPLE  V.  COLEMAX  ET  AL.  11 

1st.  That  each  State  is  supreme  within  its  own  sphere,  as  an 
independent  sovereignty. 

3d.  That  the  Constitution  of  this  State  is  not  to  be  considered 
as  a  grant  of  power,  but  rather  as  a  restriction  upon  the  powers 
of  the  Legislature;  and  that  it  is  competent  for  the  Legislature  to 
exercise  all  powers  not  forbidden  bv  the  Constitution  of  the  State, 
or  delegated  to  the  General  Government,  or  prohibited  by  the  Con- 
stitution of  the  United  States. 

From  this  it  follows  that  the  power  of  the  Legislature  to  tax 
trades,  professions,  and  occupations,  is  a  matter  completely  within 
the  control,  and,  unless  inhibited  by  the  Constitution,  eminently 
belonging  to,  and  resting  in,  the  sound  discretion  of  the  Legisla- 
ture. This  principle  has  been  repeatedly  maintained  by  the  Courts 
of  almost  every  State  in  the  Union,  and  reiterated  by  the  decisions 
of  the  Supreme  Court  of  the  United  States. 

It  becomes  necessary,  then  to  inquire  if  this  power  has  been 
withdrawn  by  our  Constitution,  from  the  Legislature. 

This  position  seems  to  have  been  abandoned,  upon  the  argument 
of  the  case.  In  fact,  so  strong  are  the  authorities  and  obvious  the 
rules  of  construction,  that  it  would  be  almost  insulting  the  intel- 
ligence of  any  respectable  tribunal  to  contend  for  it. 

But  it  is  contended  that,  conceding  this  power  to  tax  occupations 
and  professions,  it  has  been  limited  by  the  13th  section  of  the 
llth  article  of  the  Constitution,  which  provides  that  "Taxation 
shall  be  equal  and  uniform  throughout  the  state.  All  property 
shall  be  taxed  in  proportion  to  its  value,  to  be  ascertained  as  di- 
rected by  law;  but  Assessors  and  Collectors  of  town,  county  and 
State  taxes  shall  be  elected  by  the  qualified  electors  of  the  district, 
county  or  town  in  which  the  property  taxed  for  State,  county  or 
town  purposes  is  situated." 

Do  the  words,  "shall  be  equal  and  uniform/'  operate  as  a  limita- 
tion upon  the  taxing  power  of  the  Legislature,  and  apply  to  every 
species  of  taxation  to  which  Government  may  resort  for  the  main- 
tenance of  itself,  or  are  they  to  be  taken  as  applying  only  to  direct 
taxation  upon  property,  as  such,  and  intended  to  prevent  the  Legis- 
lature from  fixing  an  arbitrary  standard  as  to  kind  or  quality,  by 
providing  that  it  shall  be  taxed  in  proportion  to  its  value,  to  be 
ascertained  as  provided  by  law? 

We  are  of  opinion,  that  the  words  "equal  and  uniform"  apply  only 
to  a  direct  tax  on  property;  that  the  Legislature  may  select  or  ex- 
empt such  property  as,  in  its  discretion,  it  may  think  proper;  and 


12  NATURE  OF  POWER  TO  TAX. 

that  these  words  do  not,  by  any  fair  rule  of  interpretation,  extend 
lo  taxes  on  occupation. 

But  it  is  contended  thai  the  Act  of  May,  1853,  violates  that  pro- 
vision of  our  Constitution  which  provides  that  "all  laws  of  a  gen- 
eral nature  shall  be  uniform  in  their  operation." 

Much  of  the  reasoning  upon  the  first  branch  of  this  case  is  ap- 
plicable to  this  point.  By  a  "uniform  operation"  it  was  intended 
that  laws  of  this  character  should,  as  near  as  possible,  affect  per- 
sons and  property  alike.  No  legislation  has  ever  yet  produced  a 
law  taxing  the  subject  for  support  of  Government,  which  really 
accomplished  this  object;  from  the  very  nature  of  the  subject  it  is 
impossible.  The  citizen  who  is  protected  in  $100,000  worth  of  im- 
proved property  in  the  City  of  San  Francisco,  paying  an  income 
from  15  to  30  per  cent  per  annum,  pays  no  more  State  tax  upon 
the  same,  than  the  one  who  lives  in  a  remote  portion  of  the  State, 
owning  the  same  amount  of  property  in  wild  and  unproductive 
lands. 

The  burdens  of  Government  cannot  fall  equally  upon  all;  the 
condition,  estate,  and  occupation  of  the  individual  must  vary  the 
operation  of  the  law  in  almost  every  case. 

The  idea  of  a  revenue  law  which  is  equal  in  its  operation  is  en- 
tirely Utopian,  and  never  can  be  realized.  If  the  Legislature  should 
pass  an  act  designedly  operating  unequally;  or  if  a  want  of  uni- 
formity in  its  operation  was  apparent  upon  its  face,  it  would  be 
the  duty  of  this  Court  to  interpose,  and  prevent  the  commission  of 
so  grave  an  injustice. 

But  if,  in  trying  to  approximate  a  correct  standard,  the  law 
may  work  a  hardship  in  particular  supposed  cases,  it  would  rather 
be  a  consideration  for  the  Legislature,  than  an  argument  for  the 
Courts. 

We  have  carefully  examined  all  the  arguments  of  the  respond- 
ents, and  are  irresistibly  impelled  to  the  conclusion,  that  the  Act 
of  May,  1853,  is  neither  in  derogation  of  the  Constitution  of  this 
State  or  the  Constitution  of  the  United  States. 

This  opinion  is  based,  as  we  believe,  on  no  new  principles,  and 
in  announcing  it,  we  but  reiterate  the  decisions  of  the  tribunals  of 
other  States. 

Without  any  precedents,  however,  to  control  us,  looking  alone  to 
the  powers  of  a  sovereign  State,  and  its  absolute  control  over  per- 
sons and  property  within  its  own  jurisdiction,  as  well  as  to  tin- 
ruinous  consequences  which  would  ensue  from  a  different  decision, 


PEOPLE  EX  REL.  GRIFFIX  V.  MAYOR.  13 

we  are  fully  of  the  opinion  that  the  taxing  power  rests  alone  in 
the  sound  discretion  of  the  Legislature,  subject  to  the  restrictions 
we  have  already  laid  down. 

Without  it,  in  cases  of  emergency  or  extraordinary  necessity. 
State  sovereignty  and  State  power  would  be  a  baseless  and  vision- 
ary phantom,  unable  alike  to  maintain  its  own  domestic  independ- 
ence and  dignity,  or  to  defend  itself  against  the  assaults  of  federal 
encroachment. 

Judgment  affirmed. 

A  petition  for  a  rehearing  was  filed  by  respondents,  but  refused 
bv  the  Court. 


PEOPLE  EX  REL.  GRIFFIX   V.   MAYOR,  ETC.,  OF  BROOK- 

LYX. 

Court  of  Appeals  of  New  York,  April,  1851. 
4  New  York  419. 

Under  the  charter  of  the  city  of  Brooklyn,  the  common  council 
in  the  year  1848  caused  Flushing  avenue,  one  of  the  streets  of  that 
city,  to  be  graded  and  paved  at  an  expense  of  $20,390.25,  which, 
according  to  a  provision  in  the  charter,  was  assessed  upon  the  own- 
ers or  occupants  of  the  lands  benefitted  by  the  improvement,  in 
proportion  to  the  amount  of  such  benefit.  After  the  assessment 
had  been  confirmed  by  the  common  council,  Griffin  and  others,  the 
relators,  caused  the  proceedings  to  be  removed  by  certiorari  into 
the  supreme  court,  where  the  proceedings  were  reversed  and  the 
assessment  annulled,  on  the  ground  that  the  statute  authorizing 
such  assessments  was  unconstitutional  and  void.  The  mayor  and 
common  council  appealed  to  this  court. 

RUGGLES,  J.  .  .  .  The  grading  and  paving  of  the  avenue 
was  done  under  a  contract  made  with  the  common  council;  and 
the  city  having  paid,  or  being  liable  for  the  amount,  the  assess- 
ment was  made  to  reimburse  the  treasury,  or  to  supply  it  with  the 
means  of  payment. 

The  Supreme  Court  reversed  and  annulled  the  assessment,  hold- 
ing, 

First.  That  the  assessment  was  not  a  lawful  exercise  of  the 
power  of  taxation. 

Secondly.  That  money  is  property;  that  it  cannot  be  taken 
from  a  citizen  for  public  use  by  the  right  of  eminent  domain, 
without  just  compensation;  and  that  the  enhancement  in  value  of 


14  NATURE  OF  POWER  TO  TAX. 

the  relator's  lands,  by  the  grading  and  paving  of  Flushing  avenue,  is 
not  that  just  compensation  within  the  meaning  of  the  constitution. 

Thirdly.  That  the  money  not  being  taken  by  the  just  exercise 
of  either  of  these  powers,  is  taken,  or  exacted,  without  due  proces? 
of  law,  and  therefore  in  violation  of  the  6th  section  of  the  first 
article  of  the  constitution,  and  the  assessment  is  void.  The  case 
has  been  heard  and  is  now  to  be  decided  on  appeal. 

Private  property  may  be  constitutionally  taken  for  public  use  in 
two  modes;  that  is  to  say,  by  taxation  and  by  right  of  eminent 
domain.  These  are  rights  which  the  people  collectively  retain  over 
the  property  of  individuals,  to  resume  such  portions  of  it  as  may 
be  necessary  for  public  use. 

The  right  of  taxation  and  the  right  of  eminent  domain  rest  sub- 
stantially on  the  same  foundation.  Compensation  is  made  when 
private  propertv  is  taken  in  either  way.  Money  is  property.  Tax- 
ation takes  it  for  public  use;  and  the  tax-payer  receives,  or  is  sup- 
posed fo  receive  his  just  compensation  in  the  protection  which  Gov- 
ernment affords  to  his  life,  liberty  and  property,  and  in  the  increase 
of  the  value  of  his  possessions  by  the  use  to  which  the  Government 
applies  the  money  raised  by  the  tax.  When  private  property  is 
taken  by  right  of  eminent  domain,  special  compensation  is  made, 
for  the  reason  hereafter  stated. 

For  the  purpose  of  determining  the  constitutional  question  raised 
on  the  argument  of  this  case,  the  first  inquiry  will  be  whether  the 
street  assessment  in  question  was  a  rightful  exercise  of  the  power 
of  taxation. 

It  is  conceded  that  the  grading  and  paving  of  Flushing  avenue 
was  a  public  work,  the  expense  of  which  might  rightfully  have 
been  raised  by  general  taxation  upon  all  the  taxable  inhabitants  of 
Brooklyn.  The  legislature  thought  proper  to  shift  the  burthen 
of  this  taxation  upon  that  part,  or  class,  of  the  taxable  inhabitants 
exclusively,  whose  lands  were  benefited  by  the  work,  and  to  im- 
pose it  on  them  in  proportion  to  the  benefit  they  respectively  re- 
ceived therefrom. 

This  change  in  the  apportionment  of  the  burthen  was  obviously 
made  for  the  purpose  of  avoiding  the  injustice  of  general  taxation 
for  a  special  local  object,  the  benefit  of  which  extended  only  to  a 
portion  of  the  inhabitants  of  the  city.  It  professed  to  apportion 
the  tax  according  to  the  maxim,  that  'Tie  who  receives  the  advan- 
tage ought  to  sustain  the  burthen,"  and  to  exact  from  each  of  the 
parties  assessed  no  more  than  his  just  share  of  the  burthen  accord- 


PEOPLE  EX  REL.  GRIFFIX  V.  MAYOR.  15 

ing  to  this  equitable  rule  of  apportionment.  The  assessment,  there- 
fore, was  taxation,  and  not  an  attempt  to  exercise  the  right  of  emi 
nent  domain. 

If  there  be  any  sound  objection  to  the  assessment  as  a  tax,  it 
must  be  an  objection  which  applies  to  the  principle  on  which  the 
tax  is  apportioned;  because  the  object  for  which  the  money  was 
to  be  raised  is,  without  dispute,  one  for  which  taxation  by  a  differ- 
ent rule  of  apportionment  would  have  been  lawful. 

It  remains  to  be  seen  whether  anything  can  be  found  in  the  Con- 
stitution; in  legal  adjudication;  in  the  practice  of  the  Govern- 
ment, or  in  the  nature  of  things,  by  which  taxation  upon  this  prin- 
ciple of  apportionment  can  be  judicially  annulled. 

For  the  purpose  of  ascertaining  what  has  been  deemed,  on  high 
authority,  the  nature  and  extent  of  the  power  of  taxation  vested  in 
the  legislatures  of  the  State  Governments,  I  refer  to  the  opinion 
of  the  late  Chief  Justice  Marshall,  in  the  case  of  Providence  Bank 
v.  Billings  (4  Peters  514,  561,  563). 

"The  power  of  legislation,  and  consequently  of  taxation,  oper- 
ates on  all  the  persons  and  property  belonging  to  the  body  politic. 
This  is  an  original  principle  which  has  its  foundation  in  society 
itself.  It  is  granted  by  all  for  the  benefit  of  all.  It  resides  in 
the  government  as  part  of  itself,  and  need  not  be  reserved  where 
property  of  any  description  or  the  right  to  use  it  in  any  manner  is 
granted  to  individuals  or  to  corporate  bodies.  However  absolute 
the  right  of  an  individual  may  be,  it  is  still  in  the  nature  of  that 
right  that  it  must  bear  a  portion  of  the  public  burthens;  and  that 
portion  must  be  determined  by  the  legislature.  This  vital  power 
may  be  abused,  but  the  interest,  wisdom  and  justice  of  the  repre- 
sentative body,  and  its  relations  with  its  constituents,  furnish  the 
only  security  against  unjust  and  excessive  taxation,  as  well  as 
against  unwise  legislation." 

Assuming  this,  as  we  safely  may,  to  be  sound  doctrine,  it  must 
be  conceded  that  the  power  of  taxation  and  of  apportioning  tax- 
ation, or  of  assigning  to  each  individual  his  share  of  the  burthen,  is 
vested  exclusively  in  the  legislature,  unless  this  power  is  limited 
or  restrained  by  some  constitutional  provision.  The  power  of  taxing 
and  the  power  of  apportioning  taxation  are  identical  and  insep- 
arable. Taxes  cannot  be  laid  without  apportionment;  and  the 
power  of  apportionment  is,  therefore,  unlimited,  unless  it  be  re- 
strained as  a  part  of  the  power  of  taxation. 

There  is  not,  and  since  the  original  organization  of  the  state 
government  there  has  not  been  any  such  constitutional  limitation 


16  NATURE  OF  POWER  TO  TAX. 

or  restraint.  The  people  have  never  ordained  that  taxation  must 
be  limited  or  regulated  by  any  or  either  of  the  rules  laid  down  by 
the  supreme  court  in  the  case  of  The  People  v.  The  Mayor  of 
Brooklyn  (G  Barb.  209),  or  in  the  case  now  under  consideration. 
They  have  not  ordained  that  taxation  shall  be  general,  so  as  to 
embrace  all  persons  or  all  taxable  persons  within  the  state,  or 
within  any  district,  or  territorial  division  of  the  state;  nor  that 
it  shall  or  shall  not  be  numerically  equal,  as  in  the  case  of  a  capita- 
tion tax ;  nor  that  it  must  be  in  the  ratio  of  the  value  of  each 
man's  land,  or  of  his  goods,  or  of  both  combined;  nor  that  a  tax 
"must  'be  co-extensive  with  the  district,  or  upon  all  the  property 
in  a  district  which  has  the  character  of  and  is  known  to  the  law 
as  a  local  sovereignty.'*  Nor  have  they  ordained  or  forbidden  thai 
a  tax  shall  be  apportioned  according  to  the  benefit  which  each  tax- 
payer is  supposed  to  receive  from  the  object  on  which  the  tax  is 
expended.  In  all  these  particulars  the  power  of  taxation  is  un- 
restrained. 

The  application  of  any  one  of  these  rules  or  principles  of  appor- 
tionment, to  all  cases,  would  be  manifestly  oppressive  and  unjust. 
Either  may  be  rightly  and  wisely  applied  to  the  particular  exigency 
to  which  it  is  best  adapted. 

Taxation  is  sometimes  regulated  by  one  of  these  principles,  and 
sometimes  by  another;  and  very  often  it  has  been  apportioned 
without  reference  to  locality  or  to  the  tax-payer's  ability  to  con- 
tribute, or  to  any  proportion  between  ihe  burthen  and  the  benefit. 
The  excise  laws  and  taxes  on  carriages  and  watches  are  among  the 
many  examples  of  this  description  of  taxation.  Some  taxes  affect 
classes  of  inhabitants  only.  All  duties  on  imported  goods  are  taxes 
on  the  class  of  consumers.  The  tax  on  one  imported  article  falls 
on  a  large  class  of  consumers,  while  the  tax  on  another  affects  com- 
paratively a  few  individuals.  The  duty  on  one  article  consumed 
by  one  class  of  inhabitants  is  twenty  per  cent  of  its  value;  while 
on  another,  consumed  by  a  different  class,  it  is  forty  per  cent.  The 
duty  on  one  foreign  commodity  is  laid  for  the  purpose  of  revenue 
mainly,  without  reference  to  the  ability  of  its  consumers  to  pay;  a? 
in  the  case  of  the  duty  on  salt.  The  duty  on  another  is  laid  for 
the  purpose  of  encouraging  domestic  manufacturers  of  the  same 
article;  thus  compelling  the  consumer  to  pay  a  higher  price  to 
one  man  than  he  could  otherwise  have  bought  the  article  for  from 
another.  These  discriminations  may  be  impolitic,  and  in  some 
oases  unjust;  but  if  the  power  of  taxation  upon  importations  had 
not  been  transferred  by  the  people  of  this  state  to  the  federal  gov- 


PEOPLE  EX  REL.  GRIFFIN  V.  MAYOR.  17 

eminent,  there  could  have  been  no  pretence  for  declaring  them  to 
be  unconstitutional  in  state  legislation. 

A  property  tax  for  the  general  purposes  of  the  government, 
either  of  the  state  at  large  or  of  a  county,  city  or  other  district,  is 
regarded  as  a  just  and  equitable  tax.  The  reason  is  obvious.  It 
apportions  the  burthen  according  to  the  benefit  more  nearly  than 
any  other  inflexible  rule  of  general  taxation.  A  rich  man  derives 
more  benefit  from  taxation,  in  the  protection  and  improvement  of 
his  property,  than  a  poor  man,  and  ought  therefore  to  pay  more. 
But  the  amount  of  each  man's  benefit  in  general  taxation  cannot 
be  ascertained  and  estimated  with  any  degree  of  certainty;  and 
for  that  reason  a  property  tax  is  adopted  instead  of  an  estimate  of 
benefits.  In  local  taxation,  however,  for  special  purposes,  the  local 
benefits  may  in  many  cases  be  seen,  traced  and  estimated  to  a 
reasonable  certainty.  At  least  this  has  been  supposed  and  as- 
sumed to  be  true  by  the  legislature,  whose  duty  it  is  to  prescribe 
rules  on  which  taxation  is  to  be  apportioned;  and  whose  determina- 
tion of  this  matter,  being  within  the  scope  of  its  lawful  power,  is 
conclusive. 

In  the  case  of  The  People  v.  Brooklyn,  before  referred  to,  it  was 
said  that  a  tax  to  be  valid  must  be  apportioned  "upon  principles  of 
just  equality,"  and  upon  all  the  property  in  the  same  political  dis- 
trict; and  that  this  is  a  fundamental  principle  of  free  government, 
which,  although  not  contained  in  the  constitution,  limits  and  con- 
trols the  power  of  the  legislature.  This  is  new  and  it  seems  to 
rne  to  be  dangerous  doctrine.  It  clothes  the  judicial  tribunals  with 
the  power  of  trying  the  validity  of  a  tax  by  a  test  neither  de- 
scribed nor  defined  by  the  constitution.  If  by  this  test  we  may 
condemn  an  assessment  apportioned  according  to  the  relation  be- 
tween burthen  and  benefit,  we  may  with  far  better  reason  condemn 
a  capitation  tax  on  the  ground  that  numerical  equality  is  not  just 
equality;  or  a  general  property  tax  for  a  local  object,  because  it 
compels  one  portion  of  the  community  to  pay  more  than  their  just 
share  for  the  benefit  of  another  portion.  All  discriminations  in 
the  taxation  of  property,  and  all  exemptions  from  taxation  on 
grounds  of  public  policy,  would  fall  by  the  application  of  this  test. 
If  this  doctrine  prevails  it  places  the  power  of  the  courts  above 
that  of  the  legislature  in  a  matter  affecting  not  only  the  vital  inter- 
ests, but  the  very  existence  of  the  government.  It  assumes  that 
the  apportionment  of  taxation  is  to  be  regulated  by  judicial  and 
not  by  legislative  discretion.  It  obstructs  the  exercise  of  powers 
which  belong  to  and  are  inherent  in  the  legislative  department^ 


18  NATURE  OF  POWER  TO  TAX. 

and  restrains  the  action  in  that  branch  of  the  government  in  cases 
in  which  the  constitution  has  left  it  free  to  act. 

'^ ..         .          •          •  •          •          • 

There  never  was  any  just  foundation  for  saying  that  local  tax- 
ation must  necessarily  be  limited  by  or  co-extensive  with  any  previ- 
ously established  district.  It  is  wrong  that  a  few  should  be  taxed 
for  the  benefit  of  the  whole;  and  it  is  equally  wrong  that  the  whole 
should  be  taxed  for  the  benefit  of  a  few.  No  one  town  ought  to 
be  taxed  exclusively  for  the  payment  of  county  expenses;  and  no 
county  should  be  taxed  for  the  expenses  incurred  for  the  benefit  of 
a  single  town.  The  same  principle  of  justice  requires  that  where 
taxation  for  any  local  object  benefits  only  a  portion  of  a  city  or 
town,  that  portion  only  should  bear  the  burthen.  There  being  no 
constitutional  prohibition,  the  legislature  may  create  a  district  for 
that  special  purpose,  or  they  may  tax  a  class  of  lands  or  person^ 
benefitted,  to  be  designated  by  the  public  agents  appointed  for  that 
purpose,  without  reference  to  town,  county  or  district  lines.  Gen- 
eral taxation  for  such  local  objects  is  manifestly  unjust.  It  bur- 
thens those  who  are  not  benefitted,  and  benefits  those  who  are  not 
burthened.  This  injustice  has  led  to  the  substitution  of  street 
assessments  in  place  of  general  taxation;  and  it  seems  to  be  im- 
possible to  deny  that  in  the  theory  of  their  apportionment  they  are 
far  more  equitable  than  general  taxation  for  the  purpose  they  are 
designed  for 

It  has  been  said  that  the  benefits  to  be  derived  from  the  grading 
and  paving  of  a  street  are  sometimes  fanciful  and  imaginary,  and 
always  uncertain  and  incapable  of  being  estimated  with  that  exact- 
ness which  is  necessary  for  the  purposes  of  justice  to  the  individ- 
uals assessed.  But  this  is  a  consideration  to  be  addressed  to  the 
legislature,  and  not  to  the  judicial  authorities.  The  courts  cannot 
assume  that  this  proposition  is  true  in  point  of  fact.  The  legis- 
lature has  evidently  acted  on  the  belief  that  it  is  untrue.  That  mis- 
takes may  have  happened,  that  abuses  may  have  been  practiced,  and 
that  injustice  may  have  been  done  in  making  street  assessments  it 
is  not  necessary  to  deny.  Mistakes,  abuses  and  injustice  have  often 
occurred  in  general  taxation.  These  are  not  grounds  on  which 
either  system  of  supplying  the  public  treasury  can  be  denounced  as 
unconstitutional.  If  the  systems  are  imperfect  they  should  be  re- 
formed by  the  legislature.  If  street  assessments  are  in  their  prac- 
tical operation  oppressive  and  unjust,  the  statutes  which  authorize 
them  should  be  repealed.  The  remedy  for  unjust  or  unwise  legis- 
lation is  not  to  be  administered  by  the  courts.  It  remains  in  the 


PEOPLE  EX  REL.  GRIFFIN  V.  MAYOR.  19 

hands  of  the  people,  and  is  to  be  wrought  out  by  means  of  a  change 
in  the  representative  body  if  it  cannot  be  otherwise  obtained.  The 
constitution  has  imposed  upon  the  legislature  the  duty  of  restrain- 
ing the  power  of  municipal  corporations  in  making  assessments,  and 
of  preventing  abuses  therein.  (Art.  8,  sec.  9.)  To  assume  that 
this  duty  has  been  and  will  be  neglected,  is  a  denial  of  that  reason- 
able confidence  which  one  part  of  the  government  ought  always  to 
entertain  towards  the  others.  The  danger  of  abuse  which  is  sup- 
posed to  exist  in  the  making  of  street  assessments  exists  in  a 
greater  or  less  degree,  in  every  conceivable  system  of  taxation,  ac- 
cording to  value;  and  if  the  courts  have  authority  to  annul  an 
assessment  on  this  ground,  they  have  the  like  authority  to  annul  any 
other  tax  assessed  upon  valuation,  on  the  same  ground.  It  need 
not  be  said  that  this  would  be  a  much  more  alarming  power  than 
the  unlimited  right  of  taxation  intrusted  by  the  people  to  their 

representatives 

This  system  of  taxation  was  in  force  at  the  time  of  the  making 
and  adoption  of  our  first,  second  and  third  constitutions,  and  has 
stood  in  our  statute  books  along  with  the  constitutions,  from  1777 
until  now,  without  prohibition  or  restraint.  Sales  of  real  estate  to 
large  amounts  have  been-  made,  and  the  lands  so  sold  are  now  held 
on  the  faith  of  the  validity  of  these  assessment  laws.  Proceedings 
under  them  have  been  brought  before  the  supreme  court  for 
review  continually  during  the  last  thirty  years.  They  have  been  liti- 
gated often  on  the  ground  of  irregularity,  and  sometimes  upon  con- 
stitutional objections.  They  have  been  confirmed  in  cases  almost 
\vithout  number.  If  the  uniform  practice  of  the  government,  from 
its  origin,  can  settle  any  question  of  this  nature,  the  power  of  the 
legislature  to  exercise  this  kind  of  taxation  would  seem  to  be 
established  by  it. 

The  judgment  of  the  supreme  court  should  be  reversed,  and  the 
assessments  affirmed. 
Ordered  accordingly. 

As  to  the  power  of  the  courts  in  some  states  to  control  the  discretion  of 
the  legislature  in  determining  the  question  of  benefit  in  the  case  of  special 
assessments  see  Hammett  v.  Philadelphia  65  Pa.  St.  146;  State  v.  Newark, 
3  Dutcher  (N.  J.  L.)  186.  Infra. 


20          NATURE  OF  POWER  TO  TAX. 

VEAZIE  BANK  V.  FENNO. 

Supreme   Court   of  the   United   States.      December,   1869. 
8  Wallace,  533. 

On  certificate  of  division  for  the  Circuit  Court  for  Maine. 

Congress  passed,  July  13,  1866,  an  act  the  second  clause  of  the 
9th  section  of  which  enacts  (14  Stat.  at  Large  146) : 

"That  every  National  banking  association,  state  bank,  or  state 
banking  association,  shall  pay  a  tax  of  ten  per  centum  on  the 
amount  of  notes  of  any  person,  state  bank,  or  state  banking  asso- 
ciation, used  for  circulation  and  paid  out  by  them  after  the  1st 
day  of  August,  1866,  and  such  tax  shall  be  assessed  and  paid  in 
such  manner  as  shall  be  prescribed  by  the  Commissioner  of  Internal 
Revenue." 

Under  this  act  a  tax  of  ten  per  cent  was  assessed  upon  the 
Veazie  Bank,  for  its  bank  notes  issued  for  circulation  after  the 
day  named  in  the  act. 

The  Veazie  Bank  was  a  corporation  chartered  by  the  state  of 
Maine,  with  the  authority  to  issue  bank  notes  for  circulation,  and 
the  notes  upon  which  the  tax  imposed  by  the  act  was  collected 
were  issued  under  this  authority.  There  was  nothing  in  the  case 
showing  that  the  bank  sustained  any  relation  to  the  State  as  a 
financial  agent,  or  that  its  authority  to  issue  notes  was  conferred 
or  exercised  with  any  special  reference  to  other  than  private  in- 
terests. 

The  bank  declined  to  pay  the  tax,  alleging  it  to  be  unconstitu- 
tional, and  the  collector  of  internal  revenue,  one  Fenno,  was  pro- 
ceeding to  make  a  distraint  in  order  to  collect  it,  with  penalty  and 
costs,  when,  in  order  to  prevent  this,  the  bank  paid  it  under  pro- 
test. An  unsuccessful  claim  having  been  made  on  the  commis- 
sioner of  internal  revenue  for  reimbursement,  suit  was  brought 
by  the  bank  against  the  collector,  in  the  court  below. 

The  case  was  presented  to  that  court  upon  an  agreed  statement 
of  facts,  and,  upon  a  prayer  for  instructions  to  the  jury,  the  judges 
found  themselves  opposed  in  opinion  on  three  questions,  the  first 
of  which — the  two  others  differing  from  it  in  form  only  and  not 
needing  to  be  recited — was  this: 

"Whether  the  second  clause  of  the  9th  section  of  the  act  of  Con- 
gress of  the  13th  of  July,  1866,  under  which  the  tax  in  this  case 
was  levied  and  collected  is  a  valid  and  constitutional  law." 

The  CHIEF  JUSTICE  delivered  the  opinion  of  the  court 

In  support  of  the  position  that  the  act  of  Congress,  so  far  a* 


VEA2IE  BANK  V.  FENNO.  21 

it  provides  for  the  levy  and  collection  of  this  tax,  is  repugnant  to 
the  Constitution,  two  propositions  have  been  argued  with  much 
force  and  earnestness. 

The  first  is  that  the  tax  in  question  is  a  direct  tax,  and  has  not 
been  apportioned  among  the  states  agreeably  to  the  Constitution. 

The  second  is  that  the  act  imposing  the  tax  impairs  a  franchise 
granted  by  the  State,  and  that  Congress  has  no  power  to  pass  any 
law  with  that  intent  or  effect. 

The  tax  under  consideration  is  a  tax  on  bank  cir- 
culation, and  may  very  well  be  classed  under  the  head  of  duties. 
Certainly  it  is  not,  in  the  sense  of  the  Constitution,  a  direct  tax. 
It  may  be  said  to  come  within  the  same  category  of  taxation  a^ 
the  tax  on  incomes  of  insurance  companies,  which  this  Court,  at 
the  last  term,  in  the  case  of  Pacific  Insurance  Co  v.  Soule  (7  Wal- 
lace 434),  held  not  to  be  a  direct  tax. 

Is  it  then  a  tax  on  a  franchise  granted  by  a  State,  which  Con- 
gress, upon  any  principle  exempting  the  reserved  powers  of  the 
States  from  impairment  by  taxation,  must  be  held  to  have  no  au- 
thority to  lay  and  collect? 

We  do  not  say  that  there  may  not  be  such  a  tax.  It  may  be 
admitted  that  the  reserved  rights  of  the  states,  such  as  the  right 
to  pass  laws,  to  give  effect  to  laws  through  executive  action,  to 
administer  justice  through  the  courts,  and  to  employ  all  necessar} 
agents  for  legitimate  purposes  of  State  government,  are  not  proper 
subjects  of  the  taxing  power  of  Congress.  But  it  cannot  be  ad- 
mitted that  franchises  granted  by  a  state  are  necessarily  exempt 
from  taxation 

A  railroad  company,  in  the  exercise  of  its  cor- 
porate franchises,  issues  freight  receipts,  bills  of  lading,  and  pas- 
senger tickets;  and  it  cannot  be  doubted  that  the  organization  of 
railroads  is  quite  as  important  to  the  State  as  the  organization  of 
banks.  But  it  will  hardly  be  questioned  that  these  contracts  of  the 
company  are  objects  of  taxation  within  the  powers  of  Congress,  and 
not  exempted  by  any  relation  to  the  State  which  granted  the  char- 
ter of  the  railroad.  And  it  seems  difficult  to  distinguish  the  tax- 
ation of  notes  issued  for  circulation  from  the  taxation  of  these  rail- 
road contracts.  Both  description?  of  contracts  are  means  of  profit 
to  the  corporations  which  issue  them ;  and  both,  as  we  think,  may 
properly  be  made  contributory  to  the  public  revenue. 

It  is  insisted,  however,  that  the  tax  in  the  case  before  us  is 
excessive,  and  so  excessive  as  to  indicate  a  purpose  on  the  part  of 


22  NATURE  OF  POWER  TO  TAX. 

Congress  to  destroy  the  franchise  of  the  bank,  and  is,  therefore, 
beyond  the  constitutional  power  of  Congress. 

The  first  answer  to  this  is  that  the  judicial  cannot  prescribe  to 
the  legislative  department  of  the  government  limitations  upon  the 
exercise  of  its  acknowledged  powers.  The  power  to  tax  may  be 
exercised  oppressively  upon  persons,  but  the  responsibility  of  the 
legislature  is  not  to  the  courts,  but  to  the  people  by  whom  its 
members  are  elected.  So,  if  a  particular  tax  bears  heavily  upon  a 
corporation  or  a  class  of  corporations,  it  cannot,  for  that  reason 
only,  be  pronounced  contrary  to  the  Constitution. 

But  there  is  another  answer  which  vindicates  equally  the  wisdom 
and  the  power  of  Congress. 

It  cannot  be  doubted  that  under  the  Constitution,  the  power  to 
provide  a  circulation  of  coin  is  given  to  Congress.  And  it  is  settled 
by  the  uniform  practice  of  the  government  and  by  repeated  de- 
cisions, that  Congress  may  constitutionally  authorize  the  emission 
of  bills  of  credit.  It  is  not  important  here  to  decide  whether  the 
quality  of  legal  tender,  in  payment  of  debts,  can  be  constitutionally 
imparted  to  these  bills;  it  is  enough  to  say  that  there  can  be  no 
question  of  the  power  of  the  government  to  emit  them;  to  make 
them  receivable  in  payment  of  debts  to  itself;  to  fit  them  for  use 
by  those  who  see  fit  to  use  them  in  all  the  transactions  of  com- 
merce; to  provide  for  their  redemption;  to  make  them  a  cur- 
rency, uniform  in  value  and  description,  and  convenient  and  useful 
for  circulation.  These  powers,  until  recently,  were  only  partially 
and  occasionally  exercised.  Lately,  however,  they  have  been  called 
into  full  activity,  and  Congress  has  undertaken  to  supply  a  cur- 
rency for  the  entire  country. 

The  methods  adopted  for  the  supply  of  this  currency  were  briefly 
explained  in  the  first  part  of  this  opinion.  It  now  consists  of  coin, 
of  United  States  notes,  and  of  the  notes  of  the  National  banks. 
Both  descriptions  of  notes  may  be  properly  described  as  bills  of 
credit,  for  both  are  furnished  by  the  government;  both  are  issued 
on  the  credit  of  the  government;  and  the  government  is  responsi- 
ble for  the  redemption  of  both;  primarily  as  to  the  first  description, 
and  immediately  upon  default  of  the  bank  as  to  the  second.  When 
these  bills  shall  be  made  convertible  into  coin,  at  the  will  of  the 
holder,  this  currency  will,  perhaps,  satisfy  the  wants  of  the  com- 
munity, in  respect  to  a  circulating  medium,  as  perfectly  as  any 
mixed  currency  that  can  be  devised. 

Having  thus,  in  the  exercise  of  undisputed  constitutional  powers, 
undertaken  to  provide  a  currency  for  the  whole  country,  it  cannot 


REES  V.  CITY  OF  WATERTOWX.  23 

be  questioned  that  Congress  may,  constitutionally,  secure  the  benefit 
of  it  to  the  people  by  appropriate  legislation.  To  this  end,  Con- 
gress has  denied  the  quality  of  legal  tender  to  foreign  coins,  and 
has  provided  by  law  against  the  imposition  of  counterfeit  and  base 
coin  on  the  community.  To  the  same  end  Congress  may  restrain, 
by  suitable  enactments,  the  circulation,  as  money,  of  any  notes  not 
issued  under  its  own  authority.  Without  this  power,  indeed,  its 
attempts  to  secure  a  sound  and  uniform  currency  for  the  country 
must  be  futile. 

Viewed  in  this  light,  as  well  as  in  the  other  light  of  a  duty  on 
contracts  or  property,  we  cannot  doubt  the  constitutionality  of  the 
tax  under  consideration. 

The  three  questions  certified  from  the  Circuit  Court  of  the  Dis- 
trict of  Maine  must,  therefore,  be  answered  affirmatively. 

As  to  the  power  of  the  legislature  to  make  use  of  the  power  of  taxation 
with  the  purpose  of  discouraging  a  particular  business  or  occupation  see 
Youngblood  v.  Sexton,  32  Mich.,  406,  Infra. 


REES  V.  CITY  OF  WATERTOWX. 

Supreme  Court  of  the  United  States.     October,  1873. 
19  Wallace  107. 

Appeal  from  the  Circuit  Court  for  the  Western  District  of  Wis- 
consin, the  case  being  thus: 

Rees,  a  citizen  of  Illinois,  being  owner  of  certain  bonds  issued 
under  authority  of  an  act  of  the  Legislature  of  the  State  of  Wis- 
consin, by  the  city  of  Watertown,  in  that  State,  to  the  Watertown 
and  Madison  Railway  Company,  and  by  the  company  sold  for  its 
benefit,  brought  suit  in  the  Circuit  Court  of  the  United  States  for 
the  District  of  Wisconsin  against  the  city,  and  in  1867,  recovered 
two  judgments  for  about  $10,000. 

In  the  summer  of  1868  he  issued  execution  upon  the  two  judg- 
ments thus  obtained,  which  were  returned  whojly  unsatisfied. 

In  November  of  the  same  year  he  procured  from  the  United 
States  Circuit  Court  a  peremptory  writ  of  mandamus,  directing  the 
city  of  Watertown  to  levy  and  collect  a  tax  upon  the  taxable  prop- 
erty of  the  city,  to  pay  the  said  judgments;  but  before  the  writ 
could  be  served,  a  majority  of  the  members  of  the  city  council 
resigned  their  offices.  This  fact  was  returned  by  the  marshal,  and 
proceedings  upon  the  mandamus  thereupon  ceased. 

In  May,  1869,  another  board  of  aldermen  having  been  elected, 


34  NATURE  OF  I'OWEK  TO  TAX. 

Rets  procured  another  writ  of  m;:iu];inms  to  be  issued,  which  writ 
was  served  on  all  the  aldermen  except  one  Holger,  who  was  sick 
at  the  time  of  the  service  upon  the  others.  No  steps  were  taken 
to  comply  with  the  requisition  of  the  writ.  An  order  to  show  cause 
why  the  aldermen  should  not  be  punished  for  contempt,  in  not 
complying  with  its  requirements,  was  obtained,  and  before  its  re- 
turn day  six  of  the  aldermen  resigned  their  offices,  leaving  in  office 
but  one  more  than  a  quorum,  of  whom  the  said  Holger,  upon  whom 
the  writ  had  not  been  served,  was  one.  Various  proceedings  were 
had  and  various  excuses  made,  the  whole  resulting  in  an  order  that 
the  aldermen  should  at  once  levy  and  collect  the  tax;  but  before 
the  order  could  be  served  upon  Holger,  he  resigned  his  office,  and 
again  the  board  was  left  without  a  quorum.  Nothing  was  accom- 
plished by  their  effort  in  aid  of  the  plaintiff,  but  fines  were  im- 
posed upon  the  recusant  aldermen,  which  were  ordered  to  be  ap- 
plied in  discharge  of  the  costs  of  the  proceedings. 

In  October,  1870,  the  plaintiff  obtained  a  third  writ  of  man- 
damus, which  resulted  as  the  former  ones  had  done,  and  by  the 
same  means,  on  the  part  of  the  officers  of  the  city.  A  special  elec- 
tion was  ordered  to  be  held  to  fill  the  vacancies  of  the  aldermen  so 
resigning,  but  no  votes  were  cast,  except  three  in  one  ward,  and 
the  person  for  whom  they  were  cast  refused  to  qualify.  No  part  of 
the  debt  was  ever  paid. 

By  the  charter  of  the  city  of  Watertown  it  was  thus  enacted: 

"Nor  shall  any  real  or  personal  property  of  any  inhabitant  of 
said  city,  or  any  individual  or  corporation,  be  levied  upon  or  sold 
by  virtue  of  any  execution  issued  to  satisfy  or  collect  any  debt,  obli- 
gation, or  contract  of  said  city." 

The  case  was  tried  in  June,  1872,  before  two  judges,  holding 
the  Circuit  Court  upon  these  questions: 

"1.  Whether,  when  the  principal  and  interest  on  the  bonds  were 
unpaid,  as  well  as  the  judgment,  and  there  being  no  property  on 
which  to  levy  an  execution,  the  plaintiff  was  confined  to  a  remedy 
at  law,  by  mandamus  or  otherwise,  to  enforce  the  payment  of  his 
judgment  recovered  in  this  court. 

"2.  Whether  it  was  competent  for  the  court,  as  a  court  of 
equity,  on  the  failure  of  the  officers  of  the  city  of  Watertown  to 
levy  the  tax  as  required  by  law,  referred  to  in  the  bill,  through 
their  neglect,  refusal,  absence,  or  resignation,  to  appoint  the  mar- 
shall  of  the  court  to  levy  and  collect  the  tax  to  pay  the  judgment." 


REES  V.  CITY  OF  WATERTOWX.  25 

The  judges  were  divided  in  opinion  upon  them  and  the  bill  wa* 
dismissed. 

The  case  was  now  here  on  certificate  of  division  and  appeal,  the 
error  assigned  being  that  the  court  dismissed  the  bill,  when  it  ought 
to  have  given  the  relief  prayed  for. 

Mr.  Justice  HUNT  delivered  the  opinion  of  the  Court. 

We  are  of  the  opinion  that  this  Court  has  not  the  power  to  direct 
a  tax  to  be  levied  for  the  payment  of  these  judgments.  This  power 
to  impose  burdens  and  raise  money  is  the  highest  attribute  of 
sovereignty,  and  is  exercised,  first,  to  raise  money  for  public  pur- 
poses only;  and,  second,  by  the  power  of  legislative  authority  only. 
It  is  a  power  that  has  not  been  extended  to  the  judiciary.  Espe- 
cially is  it  beyond  the  power  of  the  Federal  judiciary  to  assume 
the  place  of  a  State  in  the  exercise  of  this  authority  at  once  so 
delicate  and  so  important.  The  question  is  not  entirely  new  in 
this  court. 

In  the  case  of  Supervisors  v.  Rogers  (7  Wallace,  175),  an  order 
was  made  by  this  Court  appointing  the  marshal  a  commissioner, 
with  power  to  levy  a  tax  upon  the  taxable  property  of  the  county, 
to  pay  the  principal  and  interest  of  certain  bonds  issued  by  the 
county,  the  payment  of  which  had  been  refused.  That  case  was 
like  the  present,  except  that  it  occurred  in  the  State  of  Iowa,  and 
the  proceeding  was  taken  by  the  express  authority  of  a  statute  of 
that  State.  The  Court  say:  "The  next  question  is  as  to  the  ap- 
pointment of  the  marshal  as  a  commissioner  to  levy  the  tax  in 
satisfaction  of  the  judgment.  This  depends  upon  a  provision  of 
the  code  of  the  State  of  Iowa.  This  proceeding  is  found  in  a  chap- 
ter regulatinsr  proceedings  in  the  writ  of  mandamus,  and  the  power 
is  given  to  the  Court  to  appoint  a  person  to  discharge  the  duty  en- 
joined by  the  peremptory  writ  which  the  defendant  had  refused  to 
perform,  and  for  which  refusal  he  was  liable  to  an  attachment,  and 
is  express  and  unqualified.  The  duty  of  levying  the  tax  upon  the 
taxable  property  of  the  county  to  pay  the  principal  and  interest  of 
these  bonds  was  specially  enjoined  upon  the  board  of  supervisors 
by  the  act  of  the  Legislature  that  authorized  their  issue,  and  the 
appointment  of  the  marshal  as  a  commissioner  in  pursuance  of  the 
above  section  is  to  provide  for  the  performance  of  this  duty  where 
the  board  has  disobeyed  or  evaded  the  law  of  the  State  and  the 
peremptory  mandate  of  the  Court." 

The   State  of  Wisconsin,  of  which  the  city  of  Watertown  is  a 


26  NATURE  OF  POWER  TO  TAX. 

municipal  corporation,  has  passed  no  such  act.  The  case  of  Super- 
visors v.  Rogers  is,  therefore,  of  no  authority  in  the  case  before 
u?.  The  appropriate  remedy  of  the  plaintiff  was  and  is  a  writ  of 
mandamus  (Riggs  v.  Johnson  County,  6  Wallace,  193).  This  may 
be  repeated  as  often  as  the  occasion  requires.  It  is  a  judicial  writ, 
a  part  of  a  recognized  course  of  legal  proceedings.  In  the  present 
case  it  has  been  thus  far  unavailing,  and  the  prospect  of  its  future 
success  is,  perhaps,  not  flattering.  However  this  may  be,  we  are 
aware  of  no  authority  in  this  Court  to  appoint  its  own  officer  to 
execute  the  duty  thus  neglected  by  the  city  in  a  case  like  the 
present. 

In  Welch  v.  St.  Genevieve  (10  Am.  L.  Reg.,  N.  S.,  512),  at  a 
Circuit  Court  for  the  District  of  Missouri,  a  tax  was  ordered  to  be 
levied  by  the  marshal  under  similar  circumstances.  We  are  not 
able  to  recognize  the  authority  of  the  case.  No  counsel  appeared 
for  the  city  (Mr.  Reynolds  as  amicus  curiae  only) ;  no  authori- 
ties are  cited  which  sustain  the  position  taken  by  the  court;  the 
power  of  the  court  to  make  the  order  is  disposed  of  in  a  single 
paragraph,  and  the  execution  of  the  order  suspended  for  three 
months  to  give  the  corporation  an  opportunity  to  select  officers  and 
itself  to  levy  and  collect  the  tax,  with  the  reservation  of  a  longer 
suspension  if  it  should  appear  advisable.  The  judge,  in  delivering 
the  opinion  of  the  court,  states  that  the  case  is  without  precedent, 
and  cites  in  support  of  its  decision  no  other  cases  than  that  of 
Riggs  v.  Johnson  County  (9  Am.  L.  Reg.,  N.  S.,  415),  and  Lansing 
v.  Treasurer  (6  Wallace,  166).  The  first  case  cited  does  not  touch 
the  present  point.  The  Question  in  that  case  was  whether  a  man- 
damus having  been  issued  by  a  United  States  court  in  the  regu- 
lar course  of  proceedings,  its  operation  could  be  stayed  by  an  in- 
junction from  the  State  Court,  and  it  was  held  that  it  could  not  be. 
It  is  probable  that  the  case  of  Supervisors  v.  Rogers  (7  Wallace, 
175),  was  the  one  intended  to  be  cited.  This  case  has  already  been 
considered. 

The  case  of  Lansing  v.  Treasurer  (also  cited)  arose  within  the 
State  of  Iowa.  It  fell  within  the  case  of  Supervisors  v.  Rogers  and 
was  rightfully  decided  because  authorized  by  the  express  statute  of 
the  State  of  Iowa.  It  offered  no  precedent  for  the  decision  of  a 
case  arising  in  a  State  where  such  a  statute  does  not  exist. 

Entertaining  the  opinion  that  the  plaintiff  has  been  unreason- 
ably obstructed  in  the  pursuit  of  his  legal  remedies  we  should  be 
quite  willing  to  give  him  the  aid  requested,  if  the  law  permitted  it. 


CYPEESS  POND  DEAINING  CO.  V.  HOOPEE.         27 

We  cannot,  however,  find  authority  for  so  doing,  and  we  acquiesce 
in  the  conclusion  of  the  court  below,  that  the  bill  must  be  dis- 
missed. 

Judgment  affirmed. 

Mr  Justice  CLIFFORD,  with  whom  concurred  Mr.  Justice  SWAYNE, 
dissenting. 

The  court  may  however  by  mandamus  order  the  exercise  of  its  taxing 
powers  by  a  municipal  corporation  or  official  authority.  State  v.  New  Orleans, 
37  La.  Ann.  16,  Infra. 

The  power  to  tax  being  a  legislative  power,  executive  and  administrative 
bodies  have  not  the  right  to  levy  taxes  in  the  absence  of  legislative  authoriza- 
tion. Baldwin  v.  City  Council,  53  Ala.,  437 ;  State  v.  Sickles,  4  Zabriskie  (N. 
J.  L.)  125  Infra. 


II.    DELEGATION  OF  THE  TAXING  POWER. 

1.     To  Private  Corporations. 
CYPEESS  POND  DEAINING  COMPANY  V.  HOOPEE  ET  AL. 

Court  of  Appeals  of  Kentucky.    Summer  Term,  1859. 
2  Metcalfe,  *350. 

Judge  DUVALL  delivered  the  opinion  of  the  Court. 

By  an  Act  of  the  Legislature,  approved  February  13,  1856  (Ses- 
sion Acts  1855-56,  page  292),  George  Payne,  George  Henshaw, 
Thomas  E.  Given,  James  D.  Ames,  A.  L.  Churchill,  and  Willis  G. 
Hughes,  and,  the  inhabitants  living  within  the  boundaries  described 
in  a  subsequent  section  of  the  act,  were  "incorporated  and  made  a 
body  politic,  by  the  name  of  the  Cypress  Pond  Draining  Company; 
and  they  and  their  successors  shall  have  perpetual  succession,  and 
full  power  and  authority  to  drain,  and  keep  drained,  the  lands 
within  the  boundary  hereinafter  described,  at  the  costs  and  charges 
of  the  owners  and  proprietors  of  the  lands  within  said  boundary: 
and  to  make  all  necessary  and  proper  contracts  therefor;  to  sue 
and  be  sued,  plead  and  be  impleaded,  in  all  courts." 

Power  is  given  to  the  company  to  appoint  all  officers  and  agents 
necessary  to  carry  into  effect  the  provisions  of  the  act,  who  are  to 
be  under  the  control  of  the  president  and  managers  of  the  com- 
pany, and  be  removed  by  the  company  at  pleasure. 

The  board  of  managers  is  made  to  consist  of  the  persons  above 
named,  who,  out  of  their  number,  are  to  elect  a  president,  and  to 
have  power  to  fill  all  vacancies  that  may  occur  in  the  board.  The 
boundary  of  the  territory  over  which  the  powers  of  the  corporation 

*Century   edition,    Louisville,    1899. 


28  NATURE  OF  POWER  TO  TAX. 

are  to  be  exercised  is  minutely  defined,  and  comprehends  au  area 
of  14,621  acres,  according  to  a  survey  which  was  subsequently 
made,  as  directed  in  the  act.  For  the  year  1856,  and  each  year 
thereafter  for  ten  years,  the  company  is  authorized  to  collect,  on 
each  acre  of  land  within  the  boundary,  a  tax  not  exceeding  twenty- 
five  cents  per  acre,  to  be  fixed  by  the  board,  who  may  cause  an 
assessment  to  be  made  of  each  acre  of  land  within  the  boundary, 
and  list  the  same  for  collection  with  the  sheriff  of  Union  county, 
wiio  shall  collect  and  pay  over  the  same  to  the  order  of  the  board. 
The  sheriff  shall  have  the  same  power  to  collect  the  taxes  that  he 
has  to  collect  executions,  and  be  entitled  to  the  same  compensation. 
With  the  money  thus  collected  the  board  is  required  to  drain  cer- 
tain creeks  and  ponds  within  said  boundary,  in  such  manner  as 
they  shall  deem  most  practicable.  The  owners  of  any  land  sold 
under  the  provisions  of  the  act  are  to  have  two  years  from  the 
day  of  sale  to  redeem  the  same,  by  paying  to  the  purchaser  the 
amount  of  the  sale,  with  ten  per  centum  per  annum  on  the  amount 

Pursuant  to  the  provisions  of  this  act,  a  board  of  managers  con- 
sisting of  six  persons  named,  was  regularly  organized.  A  tax  of 
twenty-five  cents  on  each  acre  of  land  embraced  within  the  desig- 
nated boundary  was  assessed,  and  the  tax  lists  placed  in  the  hands 
of  the  sheriff  for  collection. 

The  appellees,  Hooper  and  thirty-three  others,  embraced  within 
the  corporate  boundary  and  subjected  to  taxation  under  the  act, 
filed  this  petition  in  equity  in  which  they  sought  to  enjoin  the 
company  from  further  proceedings  to  enforce  the  collection  of  the 
tax,  upon  the  grounds  that,  as  to  them,  the  tax  so  assessed  is  un- 
just, unequal,  and  oppressive,  and  that  the  act  authorizing  it  is  un- 
constitutional; that  said  act  was  gotten  up  and  passed  without 
their  knowledge  or  consent;  that  its  passage  was  procured  by  per- 
sons who  own  a  large  quantity  of  inundated  and  wet  lands  within 
said  boundary,  which  is  comparatively  worthless,  but  which,  when 
drained  as  proposed,  will  be  greatly  enhanced  in  value,  and  was  the 
object  of  the  owners  thus  to  enrich  themselves  by  reclaiming  their 
lands  at  the  expense  of  the  plaintiffs;  that  the  lands  owned  by 
many  of  the  plaintiffs  are  high  and  broken,  not  subject  to  inun- 
dation, and  therefore  not  to  be  increased  in  value  or  otherwise 
benefited  by  the  proposed  draining;  that  many  of  them  have  re- 
sided on  their  farms  within  the  boundary  for  a  great  many  years. 
and  that  the  creeks,  ponds  and  wet  lands  to  be  drained  have  been 
of  no  detriment  or  disadvantage  to  them  in  any  way. 

The   defendants,   the   president   and    managers   of   the    company, 


CYPRESS  POND  DRAINING  CO.  V.  HOOPER.          29 

.answered,  denying  that  in  procuring  the  passage  of  the  act  they 
•were  influenced  by  the  motives  ascribed  to  them,  but  insist  that 
their  object  was  to  promote  their  own  interest,  at  their  own  ratable 
expense,  and  the  interest  of  others.  They  say  the  lands  of  the 
plaintiffs  will  be  increased  in  value  for  agricultural  purposes,  and 
the  health  of  the  neighborhood  improved;  that  the  plaintiffs  had 
knowledge  of  the  intended  application  to  the  Legislature  for  the 
passage  of  the  act,  and  that  some  of  them  signed  the  petition  for 
that  purpose. 

Upon  final  hearing  the  Circuit  Court  was  of  opinion  that  the 
plaintiffs  were  entitled  to  the  relief  sought  by  them,  and  perpetu- 
ated their  injunction.  From  that  judgment  the  company  has  ap- 
pealed. 

Upon  the  case  thus  presented  the  question  arises,  is  the  act  of 
incorporation,  the  enforcement  of  which  is  sought  to  be  resisted  by 
the  appellees,  obligatory  and  binding  upon  them? 

The  corporation  created  by  the  act  is  essentially  and  strictly 
private.  Its  objects  and  purposes  do  not  even  partake  of  a  public- 
nature,  but  are  confined  exclusively  to  the  private  interests  of  the 
persons  subjected  to  its  operation. 

But  the  constitutional  power  of  the  Legislature  to  impose  local 
taxation  for  the  accomplishment  of  local  purposes,  is  too  well  settled 
to  admit  of  question  at  this  day.  The  principle  has  also  been  re- 
peatedly recognized  by  the  adjudications  of  this  Court  that  an  en- 
actment peremptorily  ordering  the  imposition  of  such  local  burthen 
would  not  depend  for  its  validity  upon  the  question  whether  it  had 
been  passed  upon  the  petition  of  a  majority,  or  less  than  a  majority, 
of  the  'citizens  to  be  affected  by  it,  or  without  a  petition  from  any, 
or  merely  upon  the  general  knowledge  of  the  Legislature.  (Slack 
v.  Maysville  and  Lexington  It.  R.  Co.,  13  B.  Mon.,  26;  Cheaney  v. 
Hooser,  9  B.  Mon.,  350.) 

The  power  and  discretion  of  the  Legislature  in  the  matter  of 
local  taxation  is  not,  however,  unlimited.  Ample  protection  to  the 
citizen  against  the  oppression  which  might  result  from  the  arbi- 
trary exercise  of  this  power  is  secured  in  the  clause  of  the  Consti- 
tution which  prohibits  any  man's  property  from  being  taken  or 
applied  to  public  use  without  just  compensation  made.  (Art.  13, 
sec.  14.) 

It  is  clear,  upon  the  facts  established  by  the  proof,  that  the 
operation  and  effect  of  the  act  incorporating  this  company,  what- 


30  NATl?RE  OF  POWER  TO  TAX. 

ever  may  have  been  the  object  of  those  who  procured  its  passage, 
is  to  appropriate  the  property  of  the  appellees,  without  their  con- 
sent, to  the  use  of  other  private  individuals  merely;  that  a  burthen 
has  been  imposed  upon  the  appellees  without  any  view  to  their 
interest  in  the  objects  to  be  accomplished  by  it;  that  it  is  a  c-asi- 
of  palpable  and  flagrant  inequality  in  the  burthen  as  imposed  upon 
the  persons  and  property  included  within  the  corporate  boundary, 
and  that  the  appellees  are  subjected  to  a  local  burthen  for  the  pri- 
vate benefit  of  others,  and  for  purposes  in  which  they  have  no 
appreciable  interest,  and  to  which  they  are,  therefore,  not  justly 
bound  to  contribute. 

We  need  not  comment  upon  some  of  the  extraordinary  provisions 
of  the  act  of  incorporation,  by  which  the  six  managers  named  in 
the  act  of  incorporation  are  given  full  power  to  assess  and  appro- 
priate the  taxes,  to  fill  all  vacancies  in  their  own  body,  and,  in 
short,  to  control  and  manage  the  entire  business  of  the  corporation, 
the  other  members  having  no  voice  or  agency  whatever  in  the  man- 
agement. 

For  the  reasons  already  stated,  we  concur  with  the  court  below  in 
the  opinion  that,  as  to  the  appellees,  the  act  in  question  is  inopera- 
tive and  void,  and  the  judgment  is  therefore  affirmed. 


2.     To  Municipal  Corporations. 

EX   PARTE  THE   CITY   COUXCIL  OF  MONTGOMERY,   IN 

RE  KNOX. 

Supreme  Court  of  Alabama.    December,  1879. 
64  Alabama,  463. 

In  this  case,  a  petition  was  filed  in  this  Court,  in  the  name  of 
the  State,  on  the  relation  of  the  City  Council  of  Montgomery,  ask- 
ing that  a  certiorari,  or  such  other  remedial  writ  as  might  be 
necessary,  directed  to  the  Hon.  Jas.  Q.  Smith,  judge  of  the  Second 
Judicial  Circuit,  to  remove  into  this  Court  for  revision  the  pro- 
ceedings had  before  said  Circuit  Judge  on  a  petition  for  habeas 
corpus  sued  out  by  Robert  H.  Knox,  to  procure  his  discharge  from 
custody  and  imprisonment  under  a  judgment  and  sentence  rendered 
by  the  mayor  of  the  city  of  Montgomery,  for  an  alleged  violation  of 
a  municipal  ordinance.  The  ordinance  imposed  on  lawyer?  a  tax 
of  sixteen  dollars,  as  the  price  of  a  license  for  practicing  their  pro- 
fession in  the  city  of  Montgomery,  and  provided  that  any  person 


EX  PARTE  MONTGOMERY,  IN  RE  KNOX.  31 

who  engaged  in  any  business  or  occupation,  or  practiced  any  pro- 
fession, for  which  a  license  was  required,  without  first  having  pro- 
cured a  license  as  required,  shall  be  guilty  of  a  misdemeanor,  and 
shall  be  fined,  for  each  day,  not  less  than  ten,  nor  more  than  one 
hundred  dollars;  and  by  another  ordinance  it  was  further  pro- 
vided, that  "when  any  person  is  convicted  and  fined  for  a  breach 
of  a  city  ordinance,  and  fails  to  pay  the  fine  and  costs,  the  mayor 
may  commit  him  to  custody,  or  to  labor  on  the  streets  or  other 
works  of  the  city,  one  day  for  every  dollar  of  the  fine  and  costs, 
but  not  exceeding  one  hundred  dollars  in  all  for  any  one  offense." 
Knox  was  a  lawyer,  regularly  licensed  by  the  Supreme  Court,  and 
practicing  his  profession  in  Montgomery;  and  having  failed  to 
take  out  a  license,  as  required  by  the  city  ordinance,  he  was  ar- 
rested and  tried  in  the  mayor's  court,  before  one  of  the  aldermen 
acting  as  mayor;  and  being  found  guilty,  he  was  fined  fifty  dollars 
and  costs,  and,  in  default  of  payment,  was  sentenced  to  hard  labor 
for  the  city,  for  the  term  of  fifty-three  days.  Knox  thereupon  sued 
out  a  writ  of  habeas  corpus,  returnable  before  the  Hon.  J.  Q. 
Smith;  and  on  the  hearing  of  the  case,  the  only  evidence  being  the 
judgment  against  him  and  the  several  ordinances  under  which  the 
proceedings  were  had,  the  Circuit  Judge  discharged  him.  A  copy 
of  the  city  ordinances,  the  judgment  and  sentence  against  Knox, 
and  the  proceedings  on  the  petition  for  habeas  corpus,  were  made 
exhibits  to  the  petition  filed  in  this  court;  and  the  prayer  of  the 
petition  was  for  a  certiorari,  mandamus,  or  other  remedial  writ,  to 
bring  the  proceedings  on  habeas  corpus  before  this  court  for 
review. 

BRICKELL,  C.  J.  By  the  charter  of  the  city  of  Montgomery,  the 
general  assembly  has  conferred  on  the  mayor  and  aldermen  power 
to  assess,  levy  and  'collect  annually,  a  tax  not  exceeding  one-half 
of  one  per  centum  on  the  value  of  real  estate;  and  also  "power 
and  authority  to  pass  laws  for  the  assessment,  levy  and  collection 
of  taxes"  on  various  occupations,  trades,  employments  and  profes- 
sions; and  among  others,  "on  lawyers,  doctors,  dentists,  photogra- 
phers, and  dafmerrean  artists,  a  tax  not  exceeding  fifty  dollars  per 
annum"  It  is  not  now  to  be  doubted  that,  in  the  absence  of  con- 
stitutional restraint  or  limitation,  the  General  Assembly  may  dele- 
gate to  municipal  corporations  the  power  of  taxation,  in  such  man- 
ner, and  to  such  extent,  as  it  may  deem  expedient.  It  cannot  con- 
fer on  these  corporations  the  power  to  tax  persons  or  property 
which  it  does  not  itself  possess;  nor  can  the  delegation  exceed  any 
limitation  the  constitution  may  impose.  But,  keeping  within  the 


32  NATURE  OF  POWER  TO  TAX. 

boundaries  of  its  own  power,  to  municipal  corporations  it  may  dele- 
gate the  power  to  tax  any'  and  every  subject  of  taxation  within  the 
corporate  limits,  for  municipal  purposes,  which  the  State  can  tax 
for  its  own  purposes.  Not  being  restrained  by  the  constitution, 
that  the  power  to  license  or  tax  occupations,  trades,  employments, 
and  professions,  may  by  the  General  Assembly  be  delegated  to 
municipal  corporations,  is  not  now  in  this  court,  an  open  question. 
Yuille  v.  Mayor,  3  Ala.  137;  Carroll  v.  Mayor,  12  Ala.  173;  Osborne 
v.  Mayor,  44  Ala.  493;  Goldthwaite  v.  City  Council,  50  Ala.  486; 
City  Council  v.  Shoemaker,  51  Ala.  144. 

3.  The  ordinance  of  the  city  of  Montgomery  requires,  that  any 
person  engaged  in   any  trade,  business  or  profession,  on  which  a 
tax   is   imposed,   shall  therefor   obtain  license.      Engaging  in  such 
business  without  obtaining  license,  is  declared  a  misdemeanor;  and 
for  each  day  such  business,  trade,  or  profession  is  carried  on  with- 
out license,  a  fine  of  not  less  than  ten,  nor  more  than  one  hun- 
dred dollars  may  be  recovered.     It  is  now  urged,  that  the  ordinance 
is  void — that  the  express  power  of  taxation  which  is  conferred  does 
not  include  the  power  to  exact  a  license  as  a  condition  to  engage  in 
any  of  the  trades,  &c.,  which  may  be  taxed.     The  power  to  tax 
occupations,    privileges,   &c.,   includes   the   power   to   license   them, 
and  to  compel  the  payment  of  the  tax  as  a  condition  precedent 
to  entering  upon  such  occupation,  or  exercising  such   privilege. — 
Burroughs  on  Taxation  392;  City  Council  v.  Shoemaker,  supra. 

Nor  can  we  perceive  that  the  ordinance  is  objectionable,  because 
it  visits  with  punishment  by  hard  labor  for  the  city  a  citizen  who 
refuses  to  pay  the  tax,  and  yet  engages  in  any  one  of  the  occupa- 
tions for  which  a  license  is  required.  In  that  respect  the  ordinance 
is  similar  to  the  revenue  statutes  of  the  State;  and  unless  such 
penalties  are  imposed,  the  corporate  power  of  taxation  could  be  de- 
fied and  nullified  by  the  refractory.  The  charter  expressly  confers 
on  the  city  council  the  power  to  enact  ordinances  with  penalties; 
and  declares  that  "all  persons  convicted  of  any  breach  of  the  laws 
and  ordinances  of  the  city,  failing  to  pay  any  fines  and  costs  that  may 
be  imposed,"  may  be  placed  at  work  and  labor  for  the  city,  or  under 
its  direction,  until  such  fine  and  costs  are  paid. 

4.  The  omission   of  the   State  to  tax   lawyers   does  not  affect 
the  express  power  of  the  city  to  impose  a  tax  upon  them.     That 
power  is  not  thereby  abrogated.     It  is  of  frequent  occurrence,  that 
the  State  omits  to  impose  taxes  of  this  kind,  or  omits  some  parti i  ;:- 
lar  subject  of  taxation,  to  which  the  power  of  taxation  of  municipal 


BALDWIN  V.  CITY  COUNCIL,  33 

corporations  extends,  and  no  diminution  of  that  power  is  intended. 
At  one  period  in  the  history  of  the  State,  for  six  or  seven  years,  no 
State  taxes  were  levied;  but  it  was  never  supposed  that,  in  con- 
sequence, the  power  of  municipal  corporations,  conferred  by  their 
charters,  was  affected. 

6.  The  City  Council  did  not  exceed  its  power  in  the  imposition 
of  the  tax,  nor  in  any  of  the  ordinances  which  have  been  passed  to 
enforce  its  collection.  The  jurisdiction  of  the  mayor,  or  of  the 
alderman  acting  in  his  stead,  to  judge  whether  Knox  had  violated 
the  ordinance,  not  being  disputed,  it  follows,  that  the  circuit 
judge  had  not  jurisdiction,  on  habeas  corpus,  to  discharge  Knox 
from  imprisonment;  and  his  action  in  the  premises  is  simply  void, 
furnishing  no  obstacle  to  re-arrest  under  the  judgment  of  the 
mayor.  .  .  .  .  . 


BALDWIN   V.   CITY   COUNCIL. 
PECK  V.  CITY  COUNCIL. 

Supreme   Court  of  Alabama.     December,  1875. 
53  Alabama  US1. 

BRICKELL,  C.  J.  These  cases  present  a  common  question,  the 
power  of  the  city  council  of  the  city  of  Montgomery,  to  impose  a 
tax  on  shares  of  the  capital  stock  of  national  banks. 

It  is  not  necessary  in  the  view  we  are  constrained  to  take  of 
these  cases,  to  inquire  whether  the  tax  levied  and  sought  to  be  col- 
lected by  the  citv  council  offends  the  limitations  imposed  by  the  act 
of  Congress.  Under  the  charter  of  the  city,  the  power  to  levy  taxes 
is  confined  to  a  tax  on  real  estate,  personal  property,  specifically 
enumerated,  certain  pursuits,  callings,  professions  or  occupations, 
or  business  of  a  particular  kind,  or  the  receipts  or  income  from  some 
particular  business.  There  is  no  general  power  to  impose  taxes 
on  personal  property,  nor  any  specific  power  which  can  be  con- 
strued to  authorize  the  tax  of  which  the  appellants  complain.  In 
the  absence  of  special  constitutional  restriction,  it  is  certainly 
true  the  legislature  may  confer  on  the  municipalities  it  creates, 
such  measure  of  power  to  levy  and  collect  taxes  as  it  may  deem 
expedient,  not  greater  or  other  than  it  possesses.  It  is  equally 
certain  that  this  power  is  capable  only  of  clear  and  unequivocal 
delegation.  When  express  power  to  levy  and  collect  particular  taxes 


34  NATURE  OF  POWER  TO  TAX. 

is  conferred,  the  power  to  levy  and  collect  other  taxes  is  excluded. 
Or,  if  particular  subjects  of  taxation  are  enumerated,  the  cor- 
poration has  not  capacity  to  enlarge  them.  The  charter  of  tho 
city,  limited  as  it  is  to  taxation  of  real  estate,  special  occupa- 
tions or  pursuits,  enumerated  personal  property,  within  no  one  of 
which  shares  in  a  corporation,  or  certainly  in  a  bank,  whether 
existing  under  State  or  Federal  law,  can  -  be  embraced,  does  not 
authorize  the  tax,  the  collection  of  which  is  sought  to  be  pro- 
hibited. '.  »  v".  . 


THE  STATE   (GEOEGE  HANCE,  PROSECUTOR)  V. 
SICKLES. 

Court  of  Error  and  Appeals  of  New  Jersey,  June  1853. 
4  Zabriskie  125. 

This  was  a  certiorari,  directed  to  the  collector  of  the  town  of 
Shrewsbury,  in  the  county  of  Monmouth,  to  render  into  this  court 
the  assessment  of  taxes  upon  the  prosecutor. 

ELMER,  J.  It  appears,  by  the  depositions  and  exhibits  submitted 
to  us,  that  at  the  annual  town  meeting  for  the  township  of 
Shrewsbury,  in  the  county  of  Monmouth,  held  on  the  eleventh 
day  of  March,  1851,  pursuant  to  law,  the  inhabitants  voted  to  raise 
— for  roads,  the  sum  of  five  hundred  dollars,  for  the  poor,  the 
sum  of  five  hundred  dollars,  for  schools,  "all  the  law  allows,"  and 
"ways  and  means  left  to  the  committee."  Claiming  to  act,  as  it 
would  seem,  under  the  authority  of  these  votes,  the  township  com- 
mittee, on  the  fifth  of  September  ensuing,  made  an  order  directed 
to  the  assessor,  and  purporting  to  be  signed  by  a  clerk  pro  tern.,  in 
the  following  words:  "You  are  hereby  notified  to  assess  four  thou- 
sand nine  hundred  dollars  to  defray  current  expenses  of  the  town- 
ship for  the  present  year,  for  roads,  bridges,  paupers,  public 
schools  and  incidentals.  N.  B.  The  County  and  State  tax  is 
not  included  in  the  above." 

To  the  sum  thus  ordered  the  assessor  added  the  sum  of  eleven 
hundred  eighty-four  dollars,  thirty-one  cents,  being  the  amount  of 
county  tax  apportioned  to  the  township,  and  made  out  his  dupli- 
cate for  the  sum  of  six  thousand  and  sixty  dollars,  eighty  cents. 
The  prosecutor's  proportion  of  this  assessment  was  the  sum  of  one 
hundred  and  forty  dollars  and  eighty  cents. 

The  school  money  apportioned  to  the  township  amounted  to 
four  hundred  ninety-nine  dollars  and  one  cent.  Double  this 


THE  STATE  V.  SICKLES.  35 

sum  was  all  the  town  meeting  was  authorized  at  that  time  to  raise 
for  schools.  A  resolution  to  raise  "all  the  law  allows"  is  some- 
what vague;  but,  the  amount  being  readily  ascertained  by  the 
assessor,  it  would  perhaps  be  too  strict  to  consider  it  wholly  void 
and  inoperative.  If  the  sum  thus  ordered  to  be  raised  for  schools 
be  added  to  the  one  thousand  dollars  ordered  for  the  roads  and 
the  poor  and  the  county  tax,  the  total  amount  the  assessor  was 
authorized  to  assess  will  be  the  sum  of  three  thousand  one  hun- 
dred and  eighty-two  dollars  thirty-two  cents  and  the  fees  of 
assessing,  collecting  and  paying  the  same.  The  residue  was  illegal, 
and,  so  far  as  the  prosecutor  is  concerned,  must  be  set  aside.  It  was 
decided  at  the  last  term  of  this  court,  in  the  case  of  The  State 
v.  Bently,  that  the  assessor  has  no  right  to  add  anything  for  losses 
or  other  contingencies. 

As  to  the  order  of  the  township  committee,  it  was  wholly 
illegal,  and  gave  no  authority  to  the  assessor  to  increase  the  sum 
voted  by  the  town  meeting.  The  power  vested  in  the  inhabitants 
to  order  money  to  be  raised  by  tax,  is  in  itself  a  delegated  power, 
and  cannot  be  transferred  to  the  town  committee  or  any  other 
officers.  By  law  the  committee  is  empowered  to  "examine, 
inspect,  and  report  to  the  annual,  or  other  town  meetings,  the 
accounts  and  vouchers  of  the  township  officers,  and  to  superintend 
the  expenditure  of  any  moneys  raised  by  tax  for  the  use  of  the 
township,  or  which  may  arise  from  the  balance  of  the  accounts 
of  any  of  the  township  officers,"  (Rev.  Stat.  1024),  but  has 
no  power  to  order  any  money  to  be  raised  which  is  not  specially 
voted  by  the  town  meeting.  The  inhabitants  composing  the  town 
meetings  have  themselves  no  general  power  to  vote  any  money 
at  their  discretion,  but  are  confined  to  raising  it  for  such  legal 
objects  as  are  by  law  expressly  vested  in  them  (Rev.  Stat.  1023, 
sec.  11).  A  vote,  therefore,  to  raise  a  specified  sum  for  "ways  and 
means"  would  be  illegal.  Much  more  was  it  unwarranted  to  confer 
a  power  on  the  committee  to  raise  for  ways  and  means  such  sum 
as  they  might  deem  expedient. 

The  result,  therefore,  is  that  the  prosecutor's  proportion  of  the 
sum  assessed,  beyond  what  was  authorized  by  the  town  meeting  and 
the  board  of  freeholders  and  the  fees  of  assessing  and  collecting, 
must  be  deducted  from  his  tax,  and  the  residue  affirmed.  There 
being  no  evidence  before  us  showing  how  much  was  properly  added 
for  fees,  a  commissioner  must  be  appointed,  in  pursuance  of  the 
practice  adopted  by  the  court,  to  ascertain  and  report  the  deduction 
that  ought  to  be  made,  upon  the  nrinciples  I  have  stated. 


3(>         NATURE  OF  POWER  TO  TAX. 


WILLIAM  S.  HOLT'S  APPEAL. 

Supreme   Court  of  Rhode  Island.     September,  1855. 
5  Rhode  Island  608. 

Appeal  from  a  vote  of  school  district  No.  11,  of  the  town 
of  Exeter,  authorizing  the  assessment  of  a  tax. 

From  the  statement  of  the  school  commissioner,  presented 
to  the  chief  justice  for  his  decision,  it  appeared,  that  the  dis- 
trict, at  a  special  meeting,  held  October  9th,  1858,  voted  to 
repair  their  school  house,  at  a  cost  not  to  exceed  one  hundred 
and  fifty  dollars,  and  that  the  clerk  and  trustee  were  appointed  a 
committee  to  make  the  repairs;  that  the  repairs  were  made,  and, 
in  addition,  the  house  insured  by  the  trustee,  without  a  vote 
of  the  district  authorizing  the  insurance;  and  that  on  the  30th 
day  of  October,  the  trustee  called  a  special  meeting  of  the  dis- 
trict, of  which  the  following  was  the  notice: — 

"NOTICE. 

"Notice  is  hereby  given,  that  there  will  be  a  meeting  of  the 
legal  voters  of  School  District  No.  11,  in  the  town  of  Exeter,  in 
the  school-house  in  said  district,  at  two  o'clock  in  the  afternoon, 
on  Saturday,  the  6th  of  November,  A.  D.  1858,  for  the  purpose  of 
laying  a  tax  on  the  ratable  property  of  the  district  to  meet  the 
expense  of  repairing  the  school-house  in  said  district,  and  of  trans- 
acting any  other  business  which  may  lawfully  come  before  said 
meeting. 

(Signed)  DAVID    NICHOLS,    Trustee. 

"Exeter,   October  30th,   1858." 

Upon  this  call,  the  district  meeting  was  held  at  the  time  and 
place  appointed,  and  voted  to  receive  [repair]  the  school-house  and 
assess  a  tax  to  the  amount  of  one  hundred  and  eighty-six  dollars, 
including,  in  the  amount  of  tax,  the  sum  paid  by  the  trustee  for 
insurance. 

From  this  vote,  William  S.  Holt,  a  tax-payer  in  said  district, 
appealed  to  the  commissioner,  alleging,  as  reasons,  that  the 
original  vote  limited  the  tax  to  a  sum  not  exceeding  one  hundred 
and  fifty  dollars;  that  the  notice  of  the  meeting  to  assess  a  tax 
was  illegal,  inasmuch  as  it  did  not  state  that  a  sum  greater  than 
one  hundred  and  fifty  dollars  was  necessary  to  meet  the  expenses; 
that  the  amount  of  the  tax  above  one  hundred  and  fifty  dollars  has 
not  been  approved  by  the  school  committee  of  the  town;  that 


WILLIAM  S.  HOLT'S  APPEAL.  3V 

one  item  of  this  additional  expense  was  incurred  by  ceiling  the 
walls  between  the  window  sills  and  the  floor,  which  the  district 
voted  not  to  do;  that  the  expense  was  also  increased  by  the  amount 
paid  for  insurance;  that  bills  to  the  amount  of  one  hundred  and 
sixty-seven  dollars  only  were  presented  at  the.  meeting,  the  com- 
mittee on  repairs  merely  stating,  that  some  of  the  bills  had  not 
been  presented;  and  that  the  repairs  had  cost  too  much. 

AMES,  C.  J.  I  am  of  the  opinion  that  the  fair  construction 
of  sect.  4  ch.  61,  of  the  Revised  Statutes,  requires,  that  the  amount 
of  a  tax  to  be  levied  by  a  school  district  on  the  ratable  property 
within  its  limits,  should  be  first  approved  by  the  school  com- 
mittee of  the  town.  Such  approval  seems  to  me  to  be  a  condition  of 
the  right  to  raise  the  tax. 

The  power  to  insure  the  school-house  and  its  appendages  against 
damage  by  fire  is,  by  section  3  of  the  same  chapter,  reposed  in 
the  district,  and  not  in  the  trustee;  and  although  a  legal  vote 
of  the  district  to  raise  money  to  pay  the  premium  would  be  a 
sufficient  ratification  of  the  trustee's  act  in  this  respect,  the  notice 
of  the  district  meeting,  held  November  6,  1858,  accompanying  the 
statement,  and  which  declares  the  special  purpose  of  the  meeting 
to  be  the  'laying  of  a  tax  to  meet  the  expenses  of  repairing  the 
school-house  in  said  district,"  seems  to  me  not  sufficient  to  justify 
the  meeting  in  raising,  as  an  addition  to  the  tax,  and  by  way 
of  ratification  of  the  action  of  the  trustee  in  insuring  the  school- 
house,  &c.,  the  premium  paid  by  the  trustee  for  the  insurance. 
The  notice  should,  to  comply  with  sect.  5,  ch.  62,  of  the  Revised 
Statutes,  state  the  whole  object  or  purpose  of  the  special  meeting. 

The  other  grounds  of  the  appeal  cannot,  upon  the  statement  of 
facts  submitted  to  me,  be  sustained;  but,  for  the  reasons  above 
given,  my  decision  is,  that  the  assessment  of  the  tax  by  School  Dis- 
trict Xo.  11  of  the  town  of  Exeter,  at  the  special  meeting  held 
November  6,  1858,  is  void;  and  that  having  first  obtained  the 
approbation  of  the  school  committee  of  the  town  to  the  amount 
of  the  tax,  they  must,  if  they  would  levy  it  on  the  ratable  property 
of  the  district,  do  so  at  a  meeting,  of  the  purposes  of  which  due 
notice  has  been  given.  This  wall  not  be  given,  if,  when  the  notice 
specifies  that  a  tax  is  intended  to  be  laid  for  one  purpose  only, 
the  meeting  proceeds  to  lay  a  tax  for  another  also. 


NATURE  OF  POWER  TO  TAX. 


WILLIAMSON  V.  NEW  JERSEY. 

Supreme  Court  of  the   United  States.     October,  1888. 
130  United  States  189. 

Mr.    Justice    BLATCHFORD    delivered    the    opinion    of   the   court. 

This  is  a  writ  of  error  to  the  Supreme  Court  of  the  State  of 
New  Jersey.  The  case  arose  on  a  writ  of  certiorari  issued  by 
that  court  at  the  instance  of  the  mayor  and  common  council  of 
the  city  of  New  Brunswick,  to  review  an  assessment  for  taxa- 
tion made  by  the  township  of  North  Brunswick,  and  a  levy  made 
by  the  collector  of  that  township,  against  a  farm  known  as  the 
"poor  farm/'  and  personal  property  thereon,  situated  in  the  town- 
ship of  North  Brunswick,  and  owned  by  the  mayor  and  common 
council  of  the  city  of  New  Brunswick. 

It  was  agreed  between  the  attorney  for  the  plaintiff  in  the 
certiorari  and  the  attorney  for  the  defendant,  that  the  sole  ques- 
tion to  be  discussed  in  the  Supreme  Court  of  New  Jersey  was 
whether  the  poor  farm,  situated  in  the  township  of  North  Bruns- 
wick, and  owned  by  the  city  of  New  Brunswick,  was  exempt  from 
taxation;  and  that  the  poor  farm  referred  to,  the  buildings  thereon 
and  the  furniture  and  fixtures  therein,  were  used  exclusively  for 
charitable  purposes  by  the  city  of  New  Brunswick,  the  owner 
thereof. 

The  Supreme  Court  held,  15  Vroom  (44  N.  J.  Law,)  165,  (1) 
that  the  declaration  in  the  general  law  of  1866  that  all  acts  and 
parts  of  acts  whether  special  or  local  or  otherwise,  inconsistent 
with  its  provisions,  were  repealed,  abrogated  the  provisions  in 
the  prior  special  act  of  1862  for  the  taxation  of  the  poor  farm  and 
the  personal  property  thereon  by  the  township  of  North  Brunswick, 
because  such  provision  in  the  act  of  1862  was  inconsistent  with  the 
provision  of  the  act  of  1866  exempting  from  taxation  all  prop- 
erty of  the  cities  of  the  state  and  all  property  used  exclusively 
for  charitable  purposes;  (2)  that  the  legislature  could  constitu- 
tionally repeal  the  power  of  taxing  the  poor  farm  and  the  personal 
property  thereon,  given  by  the  act  of  1862  to  the  township  of  North 
Brunswick. 

The  judgment  of  the  Supreme  Court  was  that  the  assessment  of 
taxes  should  be  set  aside.  The  collector  of  the  township  removed 


WILLIAMSON  V.  NEW  JERSEY.  39 

the  case,  by  writ  of  error,  to  the  Court  of  Errors  and  Appeals  of  the 
State,  which  affirmed  the  judgment,  in  an  opinion  17  Vroom, 
(46  N.  J.  Law,)  204,  adopting  the  reasons  given  by  the  Supreme 
Court.  The  case  having  been  remitted  to  the  Supreme  Court,  the 
collector  has  brought  it  here  by  a  writ  of  error  to  that  court. 

We  concur  in  the  views  of  the  Court  of  Errors  and  Appeals  of 
New  Jersey  on  this  question 

The  true  principle  involved  in  the  case  is,  whether  the  power 
of  taxation  on  the  part  of  a  municipal  corporation  is  private 
property,  or  a  vested  right  of  property,  in  its  hands,  which,  when 
once  conferred  upon  it  by  an  act  of  the  legislature  cannot  be 

subsequently  modified  or  repealed The  question 

arising  is,  therefore,  whether  the  legislature  which  passed  the  act 
of  February  18,  1862,  could  lawfully  so  grant  the  power  of  taxation 
to  the  township  in  perpetuity,  that  a  subsequent  legislature  could 
not  repeal  or  modify  such  grant  of  power. 

We  are  clearly  of  opinion  that  such  a  grant  of  the  power  of 
taxation,  by  the  legislature  of  a  State,  does  not  form  such  a  con- 
tract between  the  State  and  the  township  as  is  within  the  protec- 
tion of  the  provision  of  the  Constitution  of  the  United  States  which 
forbids  the  passage  by  a  State  of  a  law  impairing  the  obligation 
of  contracts.  The  conferring  of  such  right  of  taxation  is  an  exer- 
cise by  the  legislature  of  a  public  and  governmental  power.  It  is 
the  imparting  to  the  township  of  a  portion  of  the  power  belonging 
to  the  State,  which  it  can  lawfully  impart  to  a  subordinate  munici- 
pal corporation.  But,  from  the  very  character  of  the  power, 
it  cannot  be  imparted  in  perpetuity,  and  is  always  subject  to 
revocation,  modification  and  control  by  the  legislative  authority 
of  the  State.  The  authorities  to  this  effect  are  uniform. 

In  the  present  case  the  second  section  of  the  act  of  February 
18,  1862,  has  no  more  force  than  if  the  words  "at  all  times  here- 
after" had  been  omitted;  and  the  section  is  to  be  construed  as  if 
it  only  temporarily  conferred  the  right  of  taxation  on  the  town- 
ship, subject  to  be  recalled  at  the  pleasure  of  the  legislature. 
There  is  no  element  of  private  property  in  the  right  of  taxation 
conferred  upon  a  municipal  corporation.  Property  acquired  by 
paying  for  it  with  money  raised  by  taxation  is  property.  The  leg- 
islation in  question  does  not  affect  or  interfere  with  any  such  prop- 
erty. The  poor  farm  and  the  personal  property  thereon  are  not 
the  property  of  the  township  of  North  Brunswick,  but  are  the 


40  NATURE  OF  POWER  TO  TAX. 

property  of  the  corporation  of  the  city  of  New  Brunswick.  Nor  is 
there  anything  violative  of  any  provision  of  the  Constitution  of 
the  United  States  in  the  enactment  of  the  legislature  of  New 
Jersey,  that  the  property  in  question  shall  he  exempt  from  taxa- 
tion because  it  is  used  exclusively  for  charitable  purposes.  The 
long  recognized  and  universally  prevalent  policy  of  making  such 
exemption  is  a  warrant  for  saying  that  the  2nd  section  of  the  act 
of  February  18,  1862j  is  fairly  to  be  regarded  as  containing 
an  implied  reservation  that  such  exemption  might  be  thereafter 
made,  as  being  the  exercise  of  a  public  and  governmental  power, 
resting  wholly  in  the  discretion  of  the  legislature,  and  not  the 
subject  of  contract. 

Judgment  affirmed. 

THE    STATE    EX   REL.    A.    MARCHAND   ET   AL.    V.    THE 
CITY  OF  NEW  ORLEANS. 

Supreme   Court   of  Louisiana.     January,   1885. 
37  Louisiana  Annual  16. 

FENNER,  J.  In  1872,  the  legislature  of  the  State  passed  act 
No.  60  of  that  year,  by  which  it  established  the  Luzenberg  Hos- 
pital in  this  city  as  the  exclusive  hospital  for  small-pox  and  further- 
provided  that  "all  indigent  oases  of  small-pox  or  other  diseases 
reported  contagious,  in  want  of  or  making  application  for  hos- 
pital aid  or  care,  shall  be  sent  to  the  hospital  designated  in 
this  act,  at  the  expense  of  the  city  of  New  Orleans,  as  usual  and 
at  the  usual  per  diem" 

Acting  under  this  direction,  the  city  entered  into  a  contract 
with  Dr.  Anfoux  then  in  charge  of  said  hospital  by  which  he  was 
to  receive  and  treat  such  patients  at  a  stipulated  compensation 
of  thirty-five  dollars  per  case.  During  the  'year  1873  he  received 
and  treated  a  large  number  of  cases,  for  which  the  amount  due  by 
the  city  under  the  contract  was  $19,670. 

In  1878  suit  was  brought  and  judgment  recovered  against  the 
city  on  the  foregoing  cause  of  action  and  for  the  amount  above 
stated,  with  interest  and  costs. 

The  judgment  has  not  been  paid;  and  the  evi- 
dence makes  it  manifest  that  under  the  cit/s  construction  of  its 
duties,  and  under  its  modes  of  execution  thereof,  many  years 
must  elapse  before  any  payment  will  be  made  upon  this  judg- 
ment. 

The    reason    why    this    debt   remains,    and    promises   to   remain, 


MARCHAND  ET  AL.  V.  NEW  OBLEANS.  41 

unpaid,  is  that  the  city  construes  her  power  and  duty  of  taxation 
to  be  governed  and  limited  by  the  provision  of  the  Consti- 
tution of  1879  to  a  tax  of  ten  mills  on  the  dollar,  in  so  far  as 
provision  for  such  judgment  is  concerned,  and  that  the  requirements 
for  her  alimony  leave,  out  of  the  receipts  from  this  tax,  nothing  or 
little  to  be  appropriated  to  the  satisfaction  of  judgments. 

To  this  the  creditor  answers  that  he  is  a  creditor  by  contract; 
that,  at  the  date  of  this  contract,  the  city  possessed,  by  law,  a 
power  of  taxation  for  "current  city  expenses  exclusive  of  interest 
and  schools"  only  limited  to  one  and  one-quarter  per  cent;  that 
quoad  this  contract  obligation  and  so  far  as  necessary  for  its 
satisfaction,  this  power  of  taxation  still  exists  unaffected  by  sub- 
sequent legislative  or  constitutional  provisions;  that,  under  the 
Act  No.  5  of  1870,  it  is  the  duty  of  the  city  authorities  to  provide 
for  the  payment  of  his  registered  judgment  by  setting  apart  in  the 
annual  budget  a  sum  for  that  purpose,  and  that,  in  order 
to  execute  this  duty,  the  correlative  duty  is  imposed  of  exercising 
the  power  of  taxation  vested  in  the  city  by  law  to  the  extent 
necessary  to  raise  the  means  to  make  such  provision. 

In  pursuance  of  these  views,  the  present  suit  was  instituted 
for  a  mandamus  directing  the  city  authorities  to  execute  and 
perform  the  duties  imposed  by  Act  No.  5  of  1870;  and,  in 
accordance  therewith,  to  set  apart  in  the  next  annual  budget 
sufficient  money  to  pay  such  judgment;  and  further  directing  them 
to  provide  in  said  budget,  by  taxation  for  current  city  expenses, 
in  excess  of  the  amount  allowed  by  law  for  the  alimony  of  the 
city  but  not  in  excess  of  one  and  one-quarter  per  cent,  the  means 
of  revenue  necessary  to  pay  relator's  said  judgment,  and  so  to  do, 
in  all  succeeding  annual  budgets,  until  the  same  be  paid. 

From  a  judgment  making  the  mandamus  preemptory,  the  cit\ 
has  appealed. 

We  lay  down  the  following  propositions  of  fact  and  law,  viz. : 

1st.  The  judgment  was  founded  on  a  contract  entered  into  in 
1872. 

2d.  At  the  date  of  the  contract,  the  city  possessed  a  power  of 
taxation  for  general  expenses  "exclusive  of  interest  and  schools," 
of  twelve  and  one-half  mills  per  annum.  See  Act  No.  73  of  1872, 
Sec.  15. 

3d.  Under  the  consistent  jurisprudence  of  the  Supreme  Court 
of  the  United  States  and  of  this  Court,  the  power  of  taxation 
existing  at  the  date  of  the  contract  is  read  into  the  contract  and 
continues  to  exist,  so  far  as  necessary  for  the  enforcement  of  the 


42  NATURE  OF  POWER  TO  TAX. 

obligations  of  the  contract,  irrespective  of  any  subsequent  legis- 
lation or  constitutional  enactments  restricting  the  power  of  taxa- 
tion. State  ex  rel.  Moore  vs.  City,  32  Ann.,  State  ex  rel.  Dillon 
vs.  City,  34  Ann.  477;  State  ex  rel.  Carriere  vs.  City,  30  Ann.; 
Von  Hoffman  vs.  Quincy,  4  Wall.  535;  Wolf  vs.  New  Orleans, 
103  U.  S.  358;  Nelson  v.  St.  Martin,  111  U.  S.  720. 

4th.  This  court  has  long  since  held  that  the  prohibitions 
against  the  issuance  of  the  writ  of  mandamus  against  officers  of 
the  city  of  New  Orleans  contained  in  Act  No.  5  of  1870,  apply 
only  to  the  cases  therein  specially  designated  and  that,  for  the 
performance  of  the  duties  imposed  hy  that  act  itself,  the  writ  of 
mandamus  was  a  proper  remedy.  State  ex  rel.  Carondelet  vs. 
New  Orleans,  30  Ann.  129. 

So  far  as  relator's  contract  and  judgment  are  concerned,  we 
have  already  shown  that  the  city  possesses  a  power  of  taxation  for 
general  purposes  of  twelve  and  one-half  mills.  She  has,  hereto- 
fore, exercised,  and  proposes  hereafter  to  exercise  this  power  only 
to  the  extent  of  ten  mills  on  the  dollar,  and,  as  the  revenues 
arising  from  this  tax  are  applicable  to,  and  required  for,  the  neces- 
sary alimony  of  the  city,  they  leave,  as  we  have  said,  little  or 
nothing  which  can  be  appropriated  for  the  payment  of  registered 
judgments. 

From  the  foregoing  statement,  it  appears  that,  to  the  extent 
necessary  for  the  provision  for  payment  of  plaintiff's  judgment, 
the  city  possesses  a  residuary  power  of  taxation  of  two  and  one-half 
mills,  not  exercised  and  which  she  refuses  to  .exercise,  the  reve- 
nues from  which  would,  under  no  circumstances,  be  applicable 
to  the  city's  alimony,  or,  indeed,  to  any  other  purpose  than  thaf 
of  satisfying  relator's  judgment  and  others  standing  in  like  case 
with  it.  It  would  be,  indeed,  an  anomaly,  if  the  city  could  escape 
from  or  postpone  her  clear  duty,  to  provide  for  the  satisfaction  of 
such  judgments,  by  simply  abstaining  from  the  exercise  of  lawful 
powers  of  taxation  to  an  extent  necessary  to  provide  the  means 
of  paying  them.  Such  an  anomaly  could  never  be  sanctioned  by 
any  court  of  justice,  since  it  would  render  the  payment  of  debts 
no  longer  obligatory  upon  municipal  corporations,  but  dependent 
purely  upon  their  will  and  caprice. 

From  the  foregoing  considerations  it  would  conclusively  appear 
that  relators  are  entitled  to  the  relief  which  they  seek,  unless 
there  is  something  in  the  nature  of  their  debt,  or  in  the  law 
existing  at  the  date  of  their  contract,  which  debars  it.  Legislation 


CHRIST  CHURCH  V.  PHILADELPHIA.  43 

subsequent  to  the  contract  has,  and  can  have  no  effect  upon  the 
rights  and  obligations  arising  from  the  contract. 

Let  it  be  well  understood  that  the  duty  to  levy  an  extra 
tax  is  not  obligatory  under  this  decree.  The  city  may  satisfy 
the  debt  out  of  its  revenues  under  the  existing  rate  of  taxation. 
But  the  insufficiency  of  such  revenues  will  be  no  excuse  for  not 
satisfying  the  judgment  and,  if  necessary,  and  only  if  necessary, 
must  provision  be  made  by  a  tax  for  general  expenses  above  ten 
mills  and  within  twelve  and  one-half  mills. 

Judgment  affirmed. 

Rehearing  refused. 

BERMUDEZ,  C.  J.,  and  POCHE,  J.,  take  no  part  in  this  opinion 
and  decree. 


III.     ALIENATION  or  THE  TAXING  POWER. 
1.     Statutory   Exemptions  From   Taxation. 

RECTOR  &c.  OF  CHRIST  CHURCH  V.  COUNTY  OF  PHILA- 
DELPHIA. 

Supreme  Court  of  the  United  States.    December,  1860. 
24  Howard  300. 

Mr.   Justice   CAMPBELL  delivered  the  opinion  of  the  court. 

This  cause  comes  before  this  court  on  a  writ  of  error  to  the 
Supreme  Court  of  Pennsylvania,  under  the  25th  section  of  the 
act  of  Congress  of  the  24th  of  September,  1789.  In  the  year 
1833  the  Legislature  of  Pennsylvania  passed  an  act  which  recited 
"that  Christ  Church  Hospital,  in  the  city  of  Philadelphia,  had 
for  many  years  afforded  an  asylum  to  numerous  poor  and  dis- 
tressed widows,  who  would  probably  else  have  become  a  public 
charge;  and  it  being  represented  that  in  consequence  of  the 
decay  of  the  buildings  of  the  hospital  estate,  and  the  increasing 
burden  of  taxes,  its  means  are  curtailed  and  its  usefulness  lim- 
ited," they  enacted,  "that  the  real  property,  including  ground  rents, 
now  belonging  and  payable  to  Christ  Church  Hospital,  in  the 
city  of  Philadelphia,  so  long  as  the  same  shall  continue  to  belong 
to  the  said  hospital,  shall  be  and  remain  free  from  taxes." 

In  the  year  1851  the  same  authority  enacted  "that  all  property 
real  and  personal,  belonging  to  any  association  or  incorporated  com- 
pany which  is  now  by  law  exempt  from  taxation,  other  than  that 


44  NATURE  OF  POWER  TO  TAX. 

which  is  in  the  actual  use  and  occupation  of  such  association  or 
incorporated  company,  and  from  which  an  income  or  revenue  is 
derived  by  the  owners  thereof,  shall  hereafter  he  subject  to  taxation 
in  the  same  manner  and  for  the  same  purposes  as  other  property 
is  now  by  law  taxable,  and  so  much  of  any  law  as  is  hereby  altered 
and  supplied  be  and  the  same  is  hereby  repealed.''  It  was  decided 
in  the  Supreme  Court  of  Pennsylvania,  that  the  exemption  con- 
ferred on  these  plaintiffs  by  the  act  of  1833  was  partially  repealed  by 
the  act  of  1851,  and  that  an  assessment  of  a  portion  of  their 
real  property  under  the  act  of  1851  was  not  repugnant  to  the 
Constitution  of  the  United  States,  as  tending  to  impair  a  legislative 
contract  alleged  to  be  contained  in  the  act  of  Assembly  of  1833 
aforesaid. 

The  plaintiffs,  claim .  that  the  exemption  conceded  by  the  act 
of  1833  is  perpetual,  and  that  the  act  itself  is  in  effect  a  contract. 
This  concession  of  the  Legislature  was  spontaneous,  and  no 
service  or  duty  or  other  remunerative  condition,  was  imposed  on 
the  corporation.  It  belongs  to  the  class  of  laws  denominated 
privileged  favordbilia.  It  attached  only  to  such  real  property  as 
belonged  to  the  corporation,  and  while  it  remained  as  its  property; 
but  it  is  not  a  necessary  implication  from  these  facts  that  the 
concession  is  perpetual,  or  was  designed  to  continue  during  the 
corporate  existence. 

Such  an  interpretation  is  not  to  be  favored,  as  the  power 
of  taxation  is  necessary  to  the  existence  of  the  State,  and  must  be 
exerted  according  to  the  varying  conditions  of  the  Commonwealth. 
The  act  of  1833  belongs  to  a  class  of  statutes  in  which  the  narrowest 
meaning  is  to  be  taken  which  will  fairly  carry  out  the  intent  of  the 
Legislature.  All  laws,  all  political  institutions,  are  dispositions 
for  the  future,  and  their  professed  object  is  to  afford  a  steady 
and  permanent  security  to  the  interests  of  society.  Bentham 
says,  "that  all  laws  may  be  said  to  be  framed  with  a  view  to  per- 
petuity; but  perpetual  is  not  synonomous  to  irrevocable;  and  the 
principle  upon  which  all  laws  ought  to  be,  and  the  greater  part  of 
them  have  been  established,  is  that  of  defeasible  perpetuity — a  per- 
petuity defeasible  by  an  alteration  of  the  circumstances  and  reasons 
on  which  the  law  is  founded."  The  inducements  that  moved  the 
Legislature  to  concede  the  favor  contained  in  the  act  of  1833 
are  special,  and  were  probably  temporary  in  their  operation.  The 
usefulness  of  the  corporation  had  been  curtailed  in  consequence  of 
the  decay  of  their  buildings  and  the  burden  of  taxes. 

It  may  be  supposed  that  in  eighteen  years  the  buildings  would  be 


STATE  OF  NEW  JEKSEY  V.  WILSON.  45 

renovated,  and  that  the  corporation  would  be  able  afterwards 
to  sustain  some  share  of  the  taxation  of  the  State.  The  act  of 
1851  embodies  the  sense  of  the  Legislature  to  this  effect. 

It  is  in  the  nature  of  such  a  privilege  as  the  act  of  1833  con- 
fers, that  it  exists  bene  placitum.,  and  may  be  revoked  at  the 
pleasure  of  the  sovereign. 

Such  was  the  conclusion  of  the  courts  in  Commonwealth  v. 
Bird,  12  Mass.  442;  Dale  v.  Governor,  3  Stew.  387;  Alexander  v. 
Willington,  2  Russ.  &  M.  35;  12  Harris  232;  Lindley's  Jurisp., 
sec.  42. 

It  is  the  opinion  of  the  court  that  there  is  no  error  in  the  judg- 
ment of  the  Supreme  Court,  within  the  scope  of  the  writ  to  that 
court,  and  its  judgment  is  affirmed. 


STATE  OF  NEW  JERSEY  V.  WILSON. 

Supreme  Court  of  the  United  States.     February,  1812. 
7  C ranch  164. 

MARSHALL,  Ch.  Justice,  delivered  the  opinion  of  the  court. 

This  is  a  writ  of  error  to  a  judgment  rendered  in  the  Court  of 
last  resort  in  the  State  of  New  Jersey,  by  which  the  Plaintiffs  allege 
they  are  deprived  of  a  right  secured  to  them  by  the  constitution  of 
the  United  States. 

The  case  appears  to  be  this. 

The  remnant  of  the  tribe  of  Delaware  Indians,  previous  to  the 
20th  of  February,  1758,  had  claims  to  a  considerable  portion 
of  lands  in  New  Jersey,  to  extinguish  which  became  an  object  with 
the  government  and  proprietors  under  the  conveyance  from  King 
Charles  II.,  to  the  Duke  of  York.  For  this  purpose  a  conven- 
tion was  held  in  February,  1758,  between  the  Indians  and  com- 
missioners appointed  by  the  government  of  New  Jersey;  at  which 
the  Indians  agreed  to  specify  particularly  the  lands  which  they 
claimed;  release  their  claim  to  all  others;  and  to  appoint  certain 
chiefs  to  treat  with  commissioners  on  the  part  of  the  government 
for  the  final  extinguishment  of  their  whole  claim. 

On  the  9th  of  August,  1758,  the  Indian  deputies  met  the  com- 
missioners and  delivered  to  them  a  proposition  reduced  to  writing — 
the  basis  of  which  was,  that  the  government  should  purchase  a  tract 
of  land  on  which  they  might  reside — in  consideration  of  which 


46  NATURE  OF  POWER  TO  TAX. 

they  would  release  their  claim  to  all  other  lands  in  New  Jersey 
south  of  the  river  Rariton. 

This  proposition  appears  to  have  been  assented  to  by  the 
commissioners;  and  the  Legislature  on  the  12th  of  August,  1758, 
passed  an  act  to  give  effect  to  this  agreement. 

This  act,  among  other  provisions,  authorizes  the  purchase  oi' 
lands  for  the  Indians,  restrains  them  from  granting  leases  or  mak- 
ing sales,  and  enacts  "that  the  lands  to  be  purchased  for  the 
Indians  aforesaid  shall  not  hereafter  be  subject  to  any  tax,  any  law, 
usage  or  custom  to  the  contrary  thereof,  in  any  wise  notwith- 
standing." 

In  virtue  of  this  act,  the  convention  with  the  Indians  was 
executed.  Lands  were  purchased  and  conveyed  to  trustees  for 
their  use,  and  the  Indians  released  their  claim  to  the  south  part 
of  New  Jersey. 

The  Indians  continued  in  peaceable  possession  of  the  lands 
thus  conveyed  to  them  until  some  time  in  the  year  1801,  when, 
having  become  desirous  of  migrating  from  the  State  of  New 
Jersey,  and  of  joining  their  brethren  at  Stockbridge,  in  the  State 
of  New  York,  they  applied  for,  and  obtained  an  act  of  the  Leg- 
islature of  New  Jersey,  authorizing  a  sale  of  their  land  in  that 
State. 

This  act  contains  no  expression  in  any  manner  respecting  the 
privilege  of  exemption  from  taxation  which  was  annexed  to  those 
lands  by  the  act,  under  which  they  were  purchased  and  settled  on 
the  Indians. 

In  1803,  the  commissioners  under  the  last  recited  act  sold 
and  conveyed  the  lands  to  the  Plaintiffs,  George  Painter  and 
others. 

In  October,  1804,  the  Legislature  passed  an  act  repealing  that 
section  of  the  act  of  August,  1758,  which  exempts  the  lands  therein 
mentioned  from  taxation.  The  lands  were  then  assessed,  and  the 
taxes  demanded.  The  Plaintiffs  thinking  themselves  injured  by  this 
assessment,  brought  the  case  before  the  Courts  in  the  manner 
prescribed  by  the  laws  of  New  Jersey,  and  in  the  highest  Court 
of  the  State,  the  validity  of  the  repealing  act  was  affirmed  and 
the  land  declared  liable  to  taxation.  The  cause  is  brought  into 
this  Court  by  writ  of  error,  and  the  question  here  to  be  decided  is, 
does  the  act  of  1804  violate  the  Constitution  of  the  United  States? 

The  Constitution  of  the  United  States  declares  that  no  State  shall 
"pass  any  bill  of  attainder,  ex  post  facto  law,  or  law  impairing  the 
obligation  of  contracts." 


STATE  OF  XEW  JERSEY  V.  WILSON.  47 

In  the  case  of  Fletcher  v.  Peck,  it  was  decided  in  this  Court  on 
solemn  argument  and  much  deliberation,  that  this  provision  of 
the  Constitution  extends  to  contracts  to  which  a  State  is  party, 
as  well  as  to  contracts  between  individuals.  The  question  then 
is  narrowed  to  the  enquiry  whether  in  the  case  stated,  a  contract 
existed  and  whether  that  contract  is  violated  by  the  act  of  1804. 

Every  requisite  to  the  formation  of  a  contract  is  found  in  the 
proceedings  between  the  then  colony  of  New  Jersey  and  the 
Indians.  The  subject  was  a  purchase  on  the  part  of  the  gov- 
ernment of  extensive  claims  of  the  Indians,  the  extinguishment 
of  which  would  quiet  the  title  to  a  large  portion  of  the  province. 
A  proposition  to  this  effect  is  made,  the  terms  stipulated,  the  con- 
sideration agreed  upon,  which  is  a  tract  of  land  with  the  privilege 
of  exemption  from  taxation;  and  then  in  consideration  of  the 
arrangement  previously  made,  one  of  which  this  act  of  assembly 
is  stated  to  be,  the  Indians  execute  their  deed  of  cession.  This 
is  certainly  a  contract  clothed  in  forms  of  unusual  solemnity.  The 
privilege,  though  for  the  benefit  of  the  Indians,  is  annexed,  by 
the  terms  which  create  it,  to  the  land  itself,  not  to  their  persons. 
It  is  for  their  advantage  that  it  should  be  annexed  to  the  land,  be- 
cause, in  the  event  of  a  sale,  on  which  alone  the  question  could  be- 
come material,  the  value  would  be  enhanced  by  it. 

It  is  not  doubted  but  that  the  State  of  New  Jersey  might  have 
insisted  on  a  surrender  of  this  privilege  as  the  sole  condition 
on  which  the  sale  of  the  property  should  be  allowed.  But  this 
condition  has  not  been  insisted  on.  The  land  has  been  sold,  with 
the  assent  of  the  State,  with  all  its  privileges  and  immunities. 
The  purchaser  succeeds,  with  the  assent  of  the  State,  to  all  right- 
of  the  Indians.  He  stands,  with  respect  to  this  land,  in  their  place 
and  claims  the  benefit  of  their  contract.  This  contract  is  cer- 
tainly impaired  by  a  law  which  would  annul  this  essential  part  of  it. 

It  is  therefore  considered  by  the  Court,  that  the  said  judgment 
be  reversed  and  annulled,  and  that  the  cause  be  remanded  to  the 
said  Court  of  Errors,  that  judgment  may  be  rendered  therein 
annulling  the  assessment  in  the  proceedings  mentioned,  so  far  as 
the  same  may  respect  the  land  in  the  said  proceedings  also 
mentioned. 


48  tfATURE  OF  POWER  TO  TAX. 

/ 

2.     Exemptions  Contained  in  Charters. 
HOME  OF  THE  FRIENDLESS  V.  ROUSE. 

Supreme  Court  of  the  United  States.     December,  1869. 
8  Wallace  ±30. 

Error   to   the   Supreme   Court   of  Missouri. 

On  the  3d  of  February,  1853,  the  Legislature  of  Missouri 

passed  "an  act  to  incorporate  the  Home  of  the  Friendless,  in 
the  city  of  St.  Louis." 

The  corporation  was  organized  and  set  in  action,  and  by  gifts, 
grants,  and  devises,  had  acquired  a  considerable  amount  of  real 
estate  in  St.  Louis.  A  constitution  adopted  by  the  State  in  the 
year  1865,  authorized  the  Legislature  to  impose  certain  taxes, 
and  soon  after,  the  Legislature  did  impose  a  tax  upon  the  real 
property  of  the  Home.  The  corporation  declining  to  pay,  the 
collector  of  taxes  for  the  county  was  about  to  levy  on  and  sell  it? 
real  estate,  when  the  corporation  filed  a  bill  in  one  of  the  State 
courts,  praying  for  an  injunction  against  collecting  the  taxes,  on 
the  ground  that  they  were  illegally  assessed,  all  property  of  the 
Home  being,  by  its  act  of  incorporation,  expressly  exempted  from 
taxation  at  all  times.  The  defendant  interposed  a  demurrer,  which 
was  overruled,  and  the  judgment  on  the  demurrer  made  final.  The 
cause  was  removed  to  the  Supreme  Court  of  the  State,  and  resulted 
in  the  reversal  of  the  judgment  of  the  lower  court,  and  the  dis- 
missal of  the  bill  or  petition. 

Mr.  Justice  DAVIS  delivered  the  opinion  of  the  court. 

The  object  for  which  the  Home  of  the  Friendless  was  incor- 
porated was  to  enable  those  persons  of  the  female  sex,  who  were 
desirous  of  establishing  a  charitable  institution  in  St.  Louis 
for  the  relief  of  destitute  and  suffering  females,  to  carry  out  their 
laudable  undertaking. 

It  can  readily  be  seen  that  a  charity  of  this  kind  would  be  of 
great  benefit  to  the  people  of  St.  Louis,  and  that  the  Legislature 
of  the  State  would  naturally  be  desirous  of  using  all  proper  means 
to  promote  it.  The  purposes  to  be  attained  by  such  a  charity  are 
usually  beyond  the  ability  of  individual  effort,  and  require  an 
association  of  persons  who  will  themselves  contribute  pecuniary 
aid,  and  are  willing  to  become  solicitors  for  the  contributions  of 
others.  Usually  the  initiation  of  such  an  enterprise  is  in  the 


HOME  OF  FRIENDLESS  V.  ROUSE.  49 

hands  of  a  few  persons  who  need  to  be  clothed  with  more  than 
ordinary  powers  in  order  to  obtain  the  successful  co-operation  of 
others.  In  no  way  could  this  co-operation  be  better  secured  than 
by  conferring  upon  the  corporators  the  authority  to  say  to  the 
benevolent  people  of  St.  Louis,  that  their  donations  in  money  or 
lands,  for  the  relief  of  the  suffering  female  poor  of  the  city, 
would  be  held  by  the  institution  undiminished  by  taxation. 

It  was  doubtless  under  the  influence  of  these  considerations,  and 
because  every  government  wishes  to  encourage  benevolent  enter- 
prises, that  the  Legislature  granted  the  charter  for  the  Home  of 
the  Friendless,  and  said  to  the  charitable  persons  engaged  in  this 
business,  that  if  they  would  organize  the  society  and  conduct  its 
affairs,  would  give  themselves  and  solicit  others  to  give  for  the 
common  purpose,  "that  the  property  of  the  corporation  shall  be 
exempt  from  taxation."  This  charter  is  a  contract  between 
the  State  of  Missouri  and  the  corporators  that  the  property  given 
for  the  charitable  uses  specified  in  it,  shall,  so  long  as  it  is  applied 
to  these  uses,  be  exempted  from  taxation.  It  follows,  that  any 
attempt  to  tax  it  impairs  the  obligation  of  the  contract 

It  is  objected  that  there  is  no  consideration  stated  in  the  act 
for  the  release  from  taxation,  which  it  is  claimed  is  necessary  in 
order  to  uphold  the  contract.  But  this  is  a  mistaken  view  of  the 
law  on  this  subject. 

There  is  no  necessity  of  looking  for  the  consideration  for  a  legis- 
lative contract  outside  of  the  objects  for  which  the  corporation  was 
created.  These  objects  were  deemed  by  the  Legislature  to  be  bene- 
ficial to  the  community,  and  this  benefit  constitutes  the  considera- 
tion for  the  contract,  and  no  other  is  required  to  support  it.  This 
has  been  the  well-settled  doctrine  of  this  court  on  this  subject  since 
the  case  of  Dartmouth  College  v.  Woodward. 

It  is  contended  that  the  rules  of  construction  applicable  to  legis- 
lative contracts  are  more  stringent  than  those  which  are  applied  to 
contracts  between  natural  persons,  and  that,  applying  these  rules  to 
tin's  contract,  it  cannot  be  sustained  as  a  perpetual  exemption  from 
taxation. 

It  is  true  that  legislative  contracts  are  to  be  construed  most 
favorably  to  the  State  if  on  a  fair  consideration  to  be  given  the 
charter,  any  reasonable  doubts  arise  as  to  their  proper  interpreta- 
tion; but,  as  every  contract  is  to  be  construed  to  accomplish  the 
intention  of  the  parties  to  it,  if  there  is  no  ambiguity  about  it,  and 
this  intention  clearly  appears  on  reading  the  instrument,  it  is  as 
much  the  dutv  of  the  court  to  uphold  and  sustain  it,  as  if  it  were 
4 


60  NATURE  OF  POWER  TO  TAX. 

a  contract  between  private  persons.  Testing  the  contract  in  ques- 
tion by  these  rules,  there  does  not  seem  to  be  any  rational  doubt 
about  its  true  meaning.  "All  property  of  said  corporation  shall  be 
exempt  from  taxation,"  are  the  words  used  in  the  act  of  incorpora- 
tion, and  there  is  no  need  of  supplying  any  words  to  ascertain  the 
legislative  intention.  To  add  the  word  "forever"  after  the  word 
"taxation"  could  not  make  the  meaning  any  clearer. 

It  was  undoubtedly  the  purpose  of  the  Legislature  to  grant  to  the 
corporation  a  valuable  franchise,  and  it  is  easy  to  see  that  the 
franchise  would  be  comparatively  of  little  value  if  the  Legislature, 
without  taking  direct  action  on  the  subject,  could  at  its  will,  re- 
sume the  power  of  taxation.  This  view  is  fortified  by  the  pro- 
visions of  the  general  law  of  the  State  regarding  corporations,  in 
force  at  the  time  this  charter  was  granted,  and  which  the  Legislature 
declared  should  not  apply  to  this  corporation.  The  seventh  section 
of  the  act  concerning  corporations,  approved  March  19,  1845,  pro- 
vided that  "the  charter  of  every  corporation  that  shall  hereafter 
be  granted  by  the  Legislature  shall  be  subject  to  alteration,  sus- 
pension and  repeal,  in  the  discretion  of  the  Legislature."  As  the 
charter  in  controversy  was  granted  in  1853,  it  would  have  been 
subject  to  this  general  law  if  the  Legislature  had  not,  in  express 
terms,  withdrawn  from  it  this  discretionary  authority.  Why  the 
necessity  of  doing  this  if  the  exemption  from  taxation  was  only 
understood  to  continue  at  the  pleasure  of  the  Legislature? 

The  validity  of  this  contract  is  questioned  at  the  bar  on  the 
ground  that  the  Legislature  had  no  authority  to  grant  away  the 
power  of  taxation.  The  answer  to  this  position  is,  that  the  question 
is  no  longer  open  for  argument  here,  for  it  is  settled  by  the  re- 
peated adjudications  of  this  court,  that  a  State  may,  by  a  contract 
based  on  a  consideration,  exempt  the  property  of  an  individual  or 
corporation  from  taxation,  either  for  a  specified  period,  or  perma- 
nently. And  it  is  equally  well  settled  that  the  exemption  is  pre- 
sumed to  be  on  sufficient  consideration,  and  binds  the  State  if  the 
charter  containing  it  is  accepted.* 

It  is  proper  to  say  that  the  present  Constitution  of  Missouri  pro- 
hibits the  Legislature  from  entering  into  a  contract  which  exempts 
the  property  of  an  individual  or  corporation  from  taxation,  but 


*Ncw  Jersey  v.  Wilson,  7  Cranch  164;  Gordon  v.  Tax  Appeal  Court,  3 
Howard  133 ;  Piqua  Bank  v.  Knoop,  16  Id.  369 ;  Ohio  Life  and  Trust  Company, 
v.  Debolt,  16  Id.  416;  Dodge  v.  Wilson,  18  Id.  331;  Mechanics'  &  Traders' 
Bank  v.  Thomas,  Ib.  384;  Mechanics'  &  Traders'  Bank  v.  Debolt,  Ib.  380; 
McGcc  v.  Mathis,  4  Wallace  143, 


COVIXGTOX  V.  KENTUCKY.  51 

when  the  charter  in  question  was  passed  there  was  no  constitutional 
restraint  on  the  action  of  the  Legislature  in  this  regard. 

Without  pursuing  the  subject  further,  we  are  of  the  opinion  that 
the  State  of  Missouri  did  make  a  contract  on  sufficient  considera- 
tion with  the  Home  of  the  Friendless,  to  exempt  the  property  of 
the  corporation  from  taxation,  and  that  the  attempt  made  on 
behalf  of  the  State  through  its  authorized  agent,  notwithstanding 
this  agreement  to  compel  it  to  pay  taxes,  is  an  indirect  mode  of 
impairing  the  obligation  of  the  contract,  and  cannot  be  allowed. 

JUDGMENT  KEVERSED,  and  the  cause  remanded  to  the  court 
below,  with  directions  to  proceed 

IX    CONFORMITY    WITH    THIS    OPINION. 

The  CHIEF  JUSTICE,  with  MILLER  and  FIELD,  JJ.,  dissented. 


COVIXGTOX  V.  KENTUCKY. 

Supreme  Court  of  the  United  States.     October,  1898. 
173  United  States,  231. 

Mr.  Justice  HARLAN  delivered  the  opinion  of  the  court. 

The  plaintiff  in  error,  a  municipal  corporation  of  Kentucky, 
insists  that  by  the  final  judgment  of  the  Court  of  Appeals  of  that 
Commonwealth  sustaining  the  validity  of  certain  taxation  of  its 
waterworks  property,.  it  has  been  deprived  of  rights  secured  by  that 
clause  in  the  Constitution  of  the  United  States  which  prohibits  any 
State  from  passing  a  law  impairing  the  obligation  of  contracts. 
That  is  the  only  question  which  this  court  has  jurisdiction  to  deter- 
mine upon  this  writ  of  error.  Rev.  Stat.  §  709. 

By  an  Act  of  the  General  Assembly  of  Kentucky,  approved  May 
1.  188ti,  the  city  of  Covington  was  authorized  to  build  a  water 
reservoir  or  reservoirs  within  or  outside  its  corporate  limits,  either 
in  the  county  of  Kenton  or  in  any  county  adjacent  thereto,  and 
acquire  by  purchase  or  condemnation  in  fee  simple  the  lands  neces- 
sary for  such  reservoirs,  and  connect  the  same  with  the  water-pipe 
system  then  existing  in  the  city;  to  build  a  pumping  house  near 
or  adjacent  to  the  Ohio  river,  and  provide  the  same  with  all  neces- 
sary machinery  and  appliances,  together  with  such  lands  as  might 
be  needed  for  the  pumping  house,  and  for  connecting  it  with  said 
or  reservoirs.  §  21. 


By   Section  31  of  that  act  it  was  provided  that  "said  reservoir 


52  NATURE  OF  POWER  TO  TAX. 

or  reservoirs,  machinery,  pipes,  mains  and  appurtances,  with  the 
land  upon  which  they  are  situated,  shall  be  and  remain  forever 
exempt  from  state,  county  and  city  tax."  Ky.  Acts,  1885-6,  c. 
897,  p.  317. 

•       ,  .  4  •  •  •  •  •  •  • 

By  the  Kentucky  Statutes  of  1894,  it  is  provided: 
"  §  4020.  All  real  and  personal  estate  within  this  State,  and 
all  personal  estate  of  persons  residing  in  this  State,  and  of  all  cor- 
porations organized  under  the  laws  of  this  State,  whether  the 
property  be  in  or  out  of  this  State,  including  intangible  property, 
which  shall  be  considered  and  estimated  in  fixing  the  value  of  cor- 
porate franchises  as  hereinafter  provided  shall  be  subject  to  taxa- 
tion, unless  the  same  be  exempt  from  taxation  by  the  Constitution, 
and  shall  be  assessed  at  its  fair  cash  value,  estimated  at  the  price 
it  would  bring  at  a  fair  voluntary  sale." 

This  act  repealed  all  acts  and  parts  of  acts  in  conflict  with  its 
provisions,  except  the  act  of  June  4,  1892,  providing  additional 
funds  for  the  ordinary  expenses  of  the  State  government,  and  the 
act  amendatory  thereof  approved  July  6,  1892. 

In  the  year  1895,  certain  lands  acquired  under  the  above  act 
of  May  1,  1886,  and  constituting  a  part  of  the  Covington  Water 
Works,  were  assessed  for  State  and  county  taxation,  pursuant  to 
the  statutes  enacted  after  the  passage  of  that  act,  and  conformably 
ab  well  to  the  Constitution  of  Kentucky  if  that  instrument  did  not 
exempt  them  from  taxation.  The  taxes  so  assessed  not  having 
been  paid,  those  lands  after  due  notice  were  sold  at  public  outcry 
by  the  sheriff,  (who  by  law  was  the  collector  of  State  and  county 
revenue,)  and  no  other  bidder  appearing,  the  Commonwealth  of 
Kentucky  purchased  them  for  $2,187.24,  the  amount  of  the  taxes, 
penalty,  commission  and  cost  of  advertising. 

The  present  action  was  brought  by  the  Commonwealth  to  recover 
possession  of  the  property  so  purchased. 

The  principal  defense  is  that  the  provision  in  the  act  of  May  1, 
1886,  that  the  reservoir  or  reservoirs,  pumping  house,  machinery, 
pipes,  mains  and  appurtenances,  with  the  land  upon  which  they 
are  situated,  "shall  be  and  remain  forever  exempt  from  state, 
county  and  city  taxes,"  constituted,  in  respect  of  the  lands  in 
question,  a  contract  between  the  city  of  Covington  and  the  Com- 
monwealth of  Kentucky,  the  obligation  of  which  was  impaired  by 
the  subsequent  legislation  to  which  reference  has  been  made. 

Referring  to  Section  170  of  the  present  Constitution  of  Kentucky 


COVIXCVTON  V.  KENTUCKY.  53 

declaring  that  <cthere  shall  be  exempt  from  taxation  public  property 
used  for  public  purposes,"  the  Court  of  Appeals  of  Kentucky,  in 
this  case,  said:  " In  our  opinion,  the  prop- 
erty in  question  is,  under  the  Constitution,  subject  to  taxation,  and 
the  statute  enacted  in  pursuance  of  it  operated  to  repeal  the  special 
act  of  May  1,  1886." 

However  much  we  may  doubt  the  soundness  of  any  interpretation 
of  the  State  Constitution  implying  that  lands  and  buildings  are  not 
public  property  used  for  public  purposes  when  owned  and  used 
under  legislative  authority  by  a  municipal  corporation,  one  of  the 
instrumentalities  or  agencies  of  the  State,  for  the  purpose,  and 
only  for  the  purpose,  of  supplying  that  corporation  and  its  people 
with  water,  and  when  the  net  revenue  from  such  property  must  be 
applied  in  the  improvement  of  public  ways,  we  must  assume,  in 
conformity  with  the  judgment  of  the  highest  court  of  Kentucky, 
that  Section  170  of  the  Constitution  of  that  Commonwealth  cannot 
be  construed  as  exempting  the  lands  in  question  from  taxation.  . 

The  fundamental  question  in  the  case  then  is  whether  at  the 
time  of  the  adoption  of  that  Constitution  the  city  of  Covington 
had  in  respect  of  the  lands  in  question,  any  contract  with  the 
State,  the  obligation  of  which  could  not  be  impaired  by  any  subse- 
quent statute  or  by  the  present  Constitution  of  Kentucky,  adopted 
in  1891.  If  the  exemption  found  in  the  act  of  1886  was  such  a 
contract,  then  it  could  not  be  affected  by  that  Constitution  any 
more  than  by  a  legislative  enactment. 

We  are  of  opinion  that  the  exemption  from  taxation  embodied 
in  that  act  did  not  tie  the  hands  of  the  Commonwealth  of  Ken- 
tucky so  that  it  could  not,  by  legislation,  withdraw  such  exemption 
and  subject  the  property  in  question  to  taxation.  The  act  of  1886 
was  passed  subject  to  the  provision  in  a  general  statute  of  Ken- 
tucky, above  referred  to,  that  all  statutes  "shall  be  subject  to 
amendment  or  repeal  at  the  will  of  the  Legislature,  unless  a  con- 
trary intent  be  therein  plainly  expressed."  If  that  act  in  any 
sense  constituted  a  contract  between  the  city  and  the  Common- 
wealth, the  reservation  in  an  existing  general  statute  of  the  right 
to  amend  or  repeal  it  was  itself  a  part  of  that  contract. 

If,  however,  the  property  in  question  lie  regarded  as  in  some 
>cnse  held  by  the  city  in  its  governmental  or  public  character,  and 
therefore  as  public  property  devoted  to  public  purposes — which  is 
the  interpretation  of  the  State  Constitution  for  which  the  city  con- 


54  NATURE  OF  POWER  TO  TAX. 

tends — there  would  still  be  no  ground  for  holding  that  the  city 
had  in  the  Act  of  1886  a  contract  within  the  meaning  of  the  Con- 
stitution of  the  United  States.  A  municipal  corporation  is  a  public 
instrumentality  established  to  aid  in  the  administration  of  the 
affairs  of  the  State.  Neither  its  charter  nor  any  legislative  act 
regulating  the  use  of  property  held  by  it  for  governmental  or 
public  purposes,  is  a  contract  within  the  meaning  of  the  Constitu- 
tion of  the  United  States.  If  the  Legislature  chooses  to  subject  to 
taxation  public  property  held  by  a  municipal  corporation  of  the 
State  for  public  purposes,  the  validity  of  such  legislation,  so  far  as 
the  national  Constitution  is  concerned,  could  not  be  questioned. 

In  New  Orleans  v.  New  Orleans  Water  Works  Co.,  142  U.  S. 
79,  91,  after  referring  to  previous  adjudications,  this  court  said 
that  the  authorities  were  full  and  conclusive  to  the  point  that  a 
municipal  corporation,  being  a  mere  agent  of  the  State,  "stands 
in  its  governmental  or  public  character  in  no  contract  relations  with 
its  sovereign,  at  whose  pleasure  its  charter  may  be  amended,  changed 
or  revoked,  without  the  impairment  of  any  constitutional  obligation, 
while  with  respect  to  its  private  or  proprietary  rights  and  interests 
it  may  be  entitled  to  the  constitutional  protection/'  Chancellor 
Kent,  in  his  Commentaries  says :  "In  respect  to  public  or  munici- 
pal corporations,  which  exist  only  for  public  purposes,  as  counties, 
cities  and  towns,  the  legislature,  under  proper  limitations,  has  a 
right  to  change,  modify,  enlarge,  restrain  or  destroy  them;  securing, 
however,  the  property  for  the  uses  of  those  for  whom  it  was  pur- 
chased. A  public  corporation,  instituted  for  purposes  connected 
with  the  administration  of  the  government,  may  be  controlled  by 
the  legislature,  because  such  a  corporation  is  not  a  contract  within 
the  purview  of  the  Constitution  of  the  United  States.  In  those 
public  corporations  there  is,  in  reality,  but  one  party,  and  the  trus- 
tees or  governors  of  the  corporation  are  merely  trustees  for  the 
public."  2  Kent's  Com.,  12th  ed,  p.  *306.  Dillon  says:  "Public, 
including  municipal,  corporations  are  called  into  being  at  the  pleas- 
ure of  the  State,  and  while  the  State  may,  and  in  the  case  of 
municipal  corporations  usually  does,  it  need  not,  obtain  the  consent 
of  the  people  of  the  locality  to  be  affected.  The  charter  or  incor- 
porating act  of  a  municipal  corporation  is  in  no  sense  a  contract 
between  the  State  and  the  corporation,  although,  as  we  shall  pres- 
ently see,  vested  rights  in  favor  of  third  persons,  if  not  indeed  in 
favor  of  the  corporation  or  rather  the  community  which  is  incor- 
porated, may  arise  under  it.  Public  corporations  within  the  mean- 
ing of  this  rule  are  such  as  are  established  for  public  purposes 


COVINGTON  V.  KENTUCKY.  55 

exclusively — that  is,  for  purposes  connected  with  the  administration 
of  civil  or  of  local  government — and  corporations  are  public  only 
when,  in  the  language  of  Chief  Justice  Marshall,  'the  whole  inter- 
ests and  franchises  are  the  exclusive  property  and  domain  of  the 
government  itself,'  such  as  quasi  corporations  (so-called),  coun- 
ties and  towns  or  cities  upon  which  are  conferred  the  powers  of 
local  administration.  Subject  to  constitutional  limitations  pres- 
ently to  be  noticed,  the  power  of  the  legislature  over  such  corpora- 
tions is  supreme  and  transcendent;  it  may,  where  there  is  no  con- 
stitutional inhibition,  erect,  change,  divide  and  even  abolish  them 
at  pleasure,  as  it  deems  the  public  good  to  require."  1  Dillon's 
Mimic.  Cor.  4th  ed.  p.  93,  §  54. 

In  any  view  of  the  case  there  is  no  escape  from  the  conclusion 
that  the  city  of  Covington  has  no  contract  with  the  State  exempting 
the  property  in  question  from  taxation  which  is  protected  by  the 
contract  clause  of  the  National  Constitution. 

Perceiving  no  error  in  the  record  of  which  this  court  may  talci 
cognizance  the  judgment  is  affirmed. 

As  to  power  to  make  exemptions  see  Chapter  VI.  Equality  and  Uniformity 
in  Taxation. 


in 


CHAPTER    III. 

LIMITATIONS  OF  THE  TAXING  POWER  BY  PARA- 
MOUNT  LAW. 

I.    EFFECT  OF  THEORY  OF  FEDERAL  GOVERNMENT. 

1.     General  Principles. 
M'CULLOCH  V.   THE   STATE   OF  MARYLAND. 

Supreme  Court  of  the  United  States.     February,  1819. 
4  Wheaton,  31 G. 

Error  to  the  Court  of  Appeals  of  the  State  of  Maryland. 

This  was  an  action  of  debt  brought  by  the  defendant  in  error, 
John  James,  who  sued  as  well  for  himself  as  for  the  State  of 
Maryland,  in  the  County  Court  of  Baltimore  County,  in  said  State, 
against  the  plaintiff  in  error,  M'Culloch,  to  recover  certain  penalties 
under  the  act  of  the  legislature  of  Maryland,  hereafter  mentioned. 
Judgment  being  rendered  against  the  plaintiff  in  error,  upon  the 
following  statement  of  facts,  agreed  and  submitted  to  the  Court 
by  the  parties,  was  affirmed  by  the  Court  of  Appeals  of  the  State 
of  Maryland,  the  highest  Court  of  law  of  said  State,  and  the  cause 
was  brought,  by  writ  of  error,  to  this  Court 

It  is  admitted  by  the  parties  in  this  cause,  by  their  counsel,  that 
there  was  passed  on  the  10th  day  of  April,  1816,  by  the.  Congress 
of  .the  United  States,  an  act,  entitled,  "an  act  to  incorporate  the 
subscribers  to  the  Bank  of  the  United  States;"  and  that  there  was 
passed,  on  the  llth  day  of  February,  1818,  by  the  General  Assem- 
bly of  Maryland,  an  act,  entitled,  "an  act  to  impose  a  tax  on  all 
Banks,  or  branches  thereof,  in  the  State  of  Maryland,  not  chartered 
by  the  legislature." 

Mr.  Chief  Justice  MARSHALL  delivered  the  opinion  of  the  Court. 

It  being  the  opinion  of  the  Court,  that  the  act  incorporating 
the  bank  is  constitutional;  and  that  the  power  of  establishing  a 
branch  in  the  State  of  Maryland  might  be  properly  exercised  by 
the  bank  itself,  we  proceed  to  inquire: 

56 


M'CULLUCH  V.  STATE  OF  MARYLAND.  57 

2.  \Vhetlier  the  State  of  Maryland  may,  without  violating  the 
Constitution,  tax  that  branch? 

That  the  power  of  taxation  is  one  of  vital  imoortance;  that  it  is 
retained  by  the  States;  that  it  is  not  abridged  by  the  grant  of  a 
similar  power  to  the  government  of  the  Union;  that  it  is  to  be  con- 
currently exercised  by  the  two  governments;  are  truths  which  have 
never  been  denied.  But,  such  is  the  paramount  character  of  the 
constitution,  that  its  capacity  to  withdraw  any  subject  from  the 
action  of  even  this  power,  is  admitted 

On  this  ground  the  counsel  for  the  bank  place  its  claim  to  be 
exempted  from  the  power  of  a  State  to  tax  its  operations.  There 
is  no  express  provision  for  the  case;  but  the  claim  has  been  sus- 
tained on  a  principle  which  so  entirely  pervades  the  constitution, 
is  so  intermixed  with  the  materials  which  compose  it,  so  interwoven 
with  its  web,  so  blended  with  its  texture,  as  to  be  incapable  of 
being  separated  from  it,  without  rending  it  into  shreds. 

This  great  principle  is,  that  the  constitution  and  the  laws  made 
in  pursuance  thereof  are  supreme;  that  they  control  the  consti- 
tutions and  laws  of  the  respective  States,  and  cannot  be  controlled 
by  them.  From  this,  which  may  be  almost  termed  an  axiom,  other 
propositions  are  deduced  as  corollaries,  on  the  truth  or  error  of 
which,  and  on  their  application  to  this  case,  the  cause  has  been 
supposed  to  depend.  These  are,  1st,  that  a  power  to  create  implies 
a  power  to  preserve.  2nd.  That  a  power  to  destroy,  if  wielded  by 
a  different  hand,  is  hostile  to,  and  incompatible  with  these  powers 
to  create  and  preserve.  3d.  That  where  this  repugnancy  exists, 
that  authority  which  is  supreme  must  control,  not  yield  to  that 
over  which  it  is  supreme. 

•  •••••••* 

The  power  of  Congress  to  create,  and,  of  course,  to  continue, 
the  bank,  was  the  subject  of  the  preceding  part  of  this  opinion; 
and  is  no  longer  to  be  considered  as  questionable. 

That  the  power  of  taxing  it  by  the  States  may  be  exercised  so  as 
to  destroy  it,  is  too  obvious  to  be  denied.  But  taxation  is  said  to 
be  an  absolute  power,  which  acknowledges  no  other  limits  than 
those  expressly  prescribed  in  the  constitution,  and  like  sovereign 
power  of  every  other  description,  is  trusted  to  the  discretion  of 
those  who  use  it.  But  the  very  terms  of  this  argument  admit  that 
the  sovereignty  of  the  State,  in  the  article  of  taxation  itself,  is 
subordinate  to,  and  may  be  controlled  by  the  constitution  of  the 
United  States.  How  far  it  has  been  controlled  by  that  instrument 
must  be  a  question  of  construction.  In  making  this  construction, 


58  LIMITATIONS  OF  THE  TAXING  POWEB. 

no  principle  not  declared,  can  be  admissable,  which  would  defeat 
the  legitimate  operations  of  a  supreme  government.  It  is  of  the 
very  essence  of  supremacy  to  remove  all  obstacles  to  its  action 
within  its  own  sphere,  and  so  to  modify  every  power  vested  in 
subordinate  governments,  as  to  exempt  its  own  operations  from 
their  own  influence.  This  effect  need  not  be  stated  in  terms. 
It  is  so  involved  in  the  declaration  of  supremacy,  so  necessarily 
implied  in  it,  that  the  expression  of  it  could  not  make  it  more 
certain.  We  must,  therefore,  keep  it  in  view  while  construing  the 

constitution It  is  admitted  that  the  power  of 

taxing  the  people  and  their  property  is  essential  to  the  very  exist- 
ence of  government,  and  may  be  legitimately  exercised  on  the  objects 
to  which  it  is  applicable,  to  the  utmost  extent  to  which  the  govern- 
ment may  chuse  to  carry  it.  The  only  security  against  the  abuse 
of  this  power,  is  found  in  the  structure  of  the  government  itself. 
In  imposing  a  tax  the  legislature  acts  upon  its  constituents.  This 
is  in  general  a  sufficient  security  against  erroneous  and  oppressive 
taxation. 

The  people  of  a  State,  therefore,  give  to  their  government  a 
right  of  taxing  themselves  and  their  property,  and  as  the  exigen- 
cies of  government  cannot  be  limited,  they  prescribe  no  limits  to 
the  exercise  of  this  right,  resting  confidently  on  the  interest  of  the 
legislator,  and  on  the  influence  of  the  constituents  over  their  rep- 
resentatives, to  guard  them  against  its  abuse.  But  the  means  em- 
ployed by  the  government  of  the  Union  have  no  such  security,  nor 
is  the  right  of  a  State  to  tax  them  sustained  by  the  same  theory. 
Those  means  are  not  given  by  the  people  of  a  particular  State,  not 
given  by  the  constituents  of  the  legislature,  which  claim  the  right  to 
tax  them,  but  by  the  people  of  all  the  States.  They  are  given  by 
all,  for  the  benefit  of  all — and  upon  theory,  should  be  subjected 
to  that  government  only  which  belongs  to  all. 

It  may  be  objected  to  this  definition,  that  the  power  of  taxa- 
tion is  not  confined  to  the  people  and  property  of  a  State.  It  may 
be  exercised  on  every  object  brought  within  its  jurisdiction. 

This  is  true.  But  to  what  source  do  we  trace  this  right?  It  is 
obvious,  that  it  is  an  incident  of  sovereignty,  and  is  co-extensive 
with  that  to  which  it  is  an  incident.  All  subjects  over  which  the 
sovereign  power  of  a  State  extends  are  objects  of  taxation;  but 
those  over  which  it  does  not  extend,  are,  upon  the  soundest  prin- 
ciples, exempt  from  taxation.  This  proposition  may  almost  be 
pronounced  self-evident. 

The  sovereignty  of  a   State  extends  to  everything  which  exists 


M'CULLOCH  V.  STATE  OF  MARYLAND.  59 

by  its  own  authority,  or  is  introduced  by  its  permission;  but  does 
it  extend  to  those  means  which  are  employed  by  Congress  to  carry 
into  execution  powers  conferred  on  that  body  by  the  people  of  the 
United  States?  We  think  it  demonstrable  that  it  does  not. 
Those  powers  are  not  given  by  the  people  of  a  single  State.  They 
are  given  by  the  people  of  the  United  States,  to  a  government 
whose  laws,  made  in  pursuance  of  the  constitution,  are  declared  to 
be  supreme.  Consequently,  the  people  of  a  single  State  cannot 
confer  a  sovereignty  which  will  extend  over  them. 

We  find,  then,  on  just  theory,  a  total  failure  of  this  original 
right  to  tax  the  means  employed  by  the  government  of  the  Union, 
for  the  execution  of  its  powers.  The  right  never  existed,  and  the 
question  whether  it  has  been  surrendered,  cannot  arise. 

But,  waiving  this  theory  for  the  present,  let  us  resume  the 
inquiry,  whether  this  power  can  be  exercised  by  the  respective 
States,  consistently  with  a  fair  construction  of  the  constitution? 

That  the  power  to  tax  involves  the  power  to  destroy;  that  the 
power  to  destroy  may  defeat  and  render  useless  the  power  to  create; 
that  there  is  a  plain  repugnance,  in  conferring  on  one  govern- 
ment a  power  to  control  the  constitutional  measures  of  another, 
which  other,  with  respect  to  those  very  measures,  is  declared  to  be 
supreme  over  that  which  exerts  the  control,  are  propositions  not  to 
be  denied.  But  all  inconsistencies  are  to  be  reconciled  by  the  magic 
of  the  word  CONFIDENCE.  Taxation,  it  is  said,  does  not  neces- 
sarily and  unavoidably  destroy.  To  carry  it  to  the  excess  of 
destruction  would  be  an  abuse,  to  presume  which,  would  banish  that 
confidence  which  is  essential  to  all  government. 

If  we  apply  the  principle  for  which  the  State  of  Maryland  con- 
tends, to  the  constitution  generally,  we  shall  find  it  capable  of 
changing  totally  the  character  of  that  instrument.  We  shall  find 
it  capable  of  arresting  all  the  measures  of  the  government,  and  of 
prostrating  it  at  the  foot  of  the  States.  The  American  people 
have  declared  their  constitution,  and  the  laws  made  in  pursuance 
thereof,  to  be  supreme;  but  this  principle  would  transfer  the 
supremacy,  in  fact,  to  the  States. 

If  the  States  may  tax  one  instrument,  employed  by  the  govern- 
ment in  the  execution  of  its  powers,  they  may  tax  any  and  every 
other  instrument  They  may  tax  the  mail;  they  may  tax  the 
mint;  they  may  tax  patent  rights;  they  may  tax  the  papers  of  the 
custom-house;  they  may  tax  judicial  process;  they  may  tax  all 


60          '   LIMITATIONS  OF  THE  TAXING  POWER. 

the  means  employed  by  the  government,  to  an  excess  which  would 
defeat  all  the  ends  of  government.  This  was  not  intended  by  the 
American  people.  Thev  did  not  design  to  make  their  government 
dependent  on  the  States. 

The  court  has  bestowed  on  this  subject  its  most  deliberate  con- 
sideration. The  result  is  a  conviction  that  the  States  have  no 
power,  by  taxation  or  otherwise,  to  retard,  impede,  burden,  or  in 
any  manner  control,  the  operations  of  the  constitutional  laws 
enacted  by  Congress  to  carry  into  execution  the  powers  vested  in 
the  general  government.  This  is,  we  think,  the  unavoidable  conse- 
quence of  that  supremacy  which  the  constitution  has  declared. 

We  are  unanimously  of  opinion,  that  the  law  passed  by  the  legis- 
lature of  Maryland,  imposing  a  tax  on  the  Bank  of  the  United 
States,  is  unconstitutional  and  void. 

This  opinion  does  not  deprive  the  States  of  any  resources  which 
they  originally  possessed.  It  does  not  extend  to  a  tax  paid  by 
the  real  property  of  the  bank,  in  common  with  the  other  real 
property  within  the  State,  nor  to  a  tax  imposed  on  the  interest 
which  the  citizens  of  Maryland  may  hold  in  this  institution,  in 
common  with  other  property  of  tts  same  description  throughout 
the  State.  But  this  is  a  tax  on  the  operations  of  the  bank,  and, 
is  consequently,  a  tax  on  the  operation  of  an  instrument  employed 
by  the  government  of  the  Union  to  carry  its  powers  into  execu- 
tion. Such  a  tax  must  be  unconstitutional. 


CARPENTER  ET  AL  V.  SNELLING. 

Supreme  Judicial  Court   of  Massachusetts.     October,   1867. 
97  Massachusetts,  452. 

Replevin  by  the  assignees  in  insolvency  of  the  estate  of  George 
W.  Pettes. 

The  plaintiffs  contended  that  the  papers  which   passed  between 

Pettes  and  the  defendant  constituted  a  mortgage;  that  they  were 

not  so  stamped  with  internal  revenue  stamps  of  the  United  State? 

-as  to  authorize  the  defendant  to  introduce  them  in  evidence  to  show 

title  to  the  property. 

BIOELOW,  C.  J.     The  only  remaining  question  is  whether  the  writ- 


THE  COLLECTOR  V.  DAY.  61 

ten  instruments  under  which  the  defendant  claims  the  property  in 
dispute  should  have  been  excluded  for  want  of  sufficient  stamps  under 
the  provisions  of  the  revenue  laws  of  the  United  States. 

But  there  is  another  view  of  this  part  of  the  case  which  leads 
us  to  the  conclusion  that  the  want  of  a  stamp  did  not  render  the 
written  document  offered  by  the  defendant  inadmissible.  The  pro- 
vision of  the  statute  of  the  United  States  already  cited  does  not  in 
terms  apply  to  the  courts  of  the  several  states.  The  language  of 
the  enactment  is  only  that  no  instruments  or  documents  not  duly 
stamped  shall  "be  admitted  or  used  as  evidence  in  any  court"  until 
the  requisite  stamps  shall  be  affixed.  This  provision  can  have  full 
operation  and  effect  if  construed  as  intended  to  apply  to  those  courts 
only  which  have  been  established  under  the  constitution  of  the 
United  States  and  by  acts  of  Congress,  over  which  the  federal  legis- 
lature can  legitimately  exercise  control,  and  to  which  they  can 
properly  prescribe  rules  regulating  the  course  of  justice  and  the 
mode  of  administering  justice.  We  are  not  disposed  to  give  a 
broader  interpretation  to  the  statute.  We  entertain  grave  doubts 
whether  it  is  within  the  constitutional  authority  of  Congress  to 
enact  rules  regulating  the  competency  of  evidence  on  the  trial  of 
cases  in  the  courts  of  the  several  states,  which  shall  be  obligatory 
upon  them.  We  are  not  aware  that  the  existence  of  such  a  power 
has  ever  been  judicially  sanctioned.  There  are  numerous  and 
weighty  arguments  against  its  existence.  We  cannot  hold  that 
there  was  an  intention  to  exercise  it,  where,  as  in  the  provision 
now  under  consideration,  the  language  is  fairly  susceptible  of  a 
meaning  which  will  give  it  full  operation  and  effect  within  the 
recognized  scope  of  the  constitutional  authority  of  Congress. 

Exceptions  overruled. 


THE   COLLECTOR  V.   DAY. 

Supreme  Court  of  the  United  States.     December,  1870. 
11   Wallace   113. 

Mr.  Justice  NELSON  delivered  the  opinion  of  the  court. 
The  case  presents  the  question  whether  or  not  it  is  competent 
for  Congress,  under  the  Constitution  of  the  United  States,  to  im- 
pose a  tax  upon  the  salary  of  a  judicial  officer  of  a  State? 
In  Dobbins  V.  The  Commissioners    of    Erie    County,    16    Peters 


62  LIMITATIONS  OF  THE  TAXING  POWKIJ. 

435,  it  was  decided  that  it  was  not  competent  for  the  legislature  of 
a  State  to  levy  a  tax  upon  the  salary  or  emoluments  of  an  officer 
of  the  United  States.  The  decision  was  placed  mainly  upon  the 
ground  that  the  officer  was  a  means  or  instrumentality  employed 
for  carrying  into  effect  some  of  the  legitimate  powers  of  the  govern- 
ment, which  could  not  be  interfered  with  by  taxation  or  otherwise 
by  the  States,  and  that  the  salary  or  compensation  for  the  service 
of  the  officer  was  inseparably  connected  with  the  office;  that  if  tho 
officer,  as  such,  was  exempt,  the  salary  assigned  for  his  support  or 
maintenance  while  holding  the  office  was  also,  for  like  reasons, 
equally  exempt. 

And  we  shall  now  proceed  to  show  that,  upon 

the  same  construction  of  that  instrument,  and  for  like  reasons, 
that  government  is  prohibited  from  taxing  the  salary  of  the  judi- 
cial officer  of  a  State. 

It  is  a  familiar  rule  of  construction  of  the  Constitution  of  the 
Union,  that  the  sovereign  powers  vested  in  the  State  governments 
by  their  respective  constitutions,  remained  unaltered  and  unim- 
paired, except  so  far  as  they  were  granted  to  the  government  of 
the  United  States.  That  the  intention  of  the  framers  of  the  Con- 
stitution in  this  respect  might  not  be  misunderstood,  this  rule 
of  interpretation  is  expressly  declared  in  the  tenth  article  of  the 
amendments,  namely:  "The  powers  not  delegated  to  the  United 
States  are  reserved  to  the  States  respectively,  or,  to  the  people." 
The  government  of  the  United  States,  therefore,  can  claim  no  pow- 
ers which  are  not  granted  to  it  by  the  Constitution,  and  the  powers 
actually  granted  must  be  such  as  are  expressly  given,  or  given 
by  necessary  implication. 

The  general  government,  and  the  States,  although  both  exist 
within  the  same  territorial  limits,  are  separate  and  distinct  sov- 
ereignties, acting  separately  and  independently  of  each  other,  within 
their  respective  spheres.  The  former  in  its  appropriate  sphere  is 
supreme;  but  the  States  within  the  limits  of  their  powers  not 
granted,  or,  in  the  language  of  the  tenth  amendment,  "reserved," 
are  as  independent  of  the  general  government  as  that  government 
within  its  sphere  is  independent  of  the  States. 

Such  being  the  separate  and  independent  con- 
dition of  the  States  in  our  complex  system,  as  recognized  by  the 
Constitution,  and  the  existence  of  which  is  so  indispensable,  that, 
without  them,  the  general  government  itself  would  disappear  from 
the  family  of  nations,  it  would  seem  to  follow,  as  a  reasonable,  if 
not  a  necessary  consequence,  that  the  means  and  instrumentalities 


THE  COLLECTOE  V.  DAY.  63 

employed  for  carrying  on  the  operations  of  their  governments,  for 
preserving  their  existence,  and  fulfilling  the  high  and  responsible 
duties  assigned  to  them  in  the  Constitution,  should  be  left  free  and 
unimpaired,  should  not  be  liable  to  be  crippled,  much  less  defeated 
by  the  taxing  power  of  another  government,  which  power  acknowl- 
edges no  limits  but  the  will  of  the  legislative  body  imposing  the 
tax. 

It  is  admitted  that  there  is  no  express  provision 

in  the  Constitution  that  prohibits  the  general  government  from 
taxing  the  means  and  instrumentalities  of  the  States,  nor  is  there- 
any  prohibiting  the  States  from  taxing  the  means  and  instrumen- 
talities of  that  government.  In  both  cases  the  exemption  rests  upon 
necessary  implication,  and  is  upheld  by  the  great  law  of  self-preser- 
vation; as  any  government,  whose  means  employed  in  conducting 
its  operations,  if  subject  to  the  control  of  another  and  distinct 
government,  can  exist  only  at  the  mercy  of  that  government.  Of 
what  avail  are  these  means  if  another  power  may  tax  them  at 
discretion  ? 

But  we  are  referred  to  the  Veazie  Bank  v.  Fenno,  8  Wallace 
533,  in  support  of  this  power  of  taxation.  That  case  furnishes  a 
strong  illustration  of  the  position  taken  by  the  Chief  Justice  in 
M'Culloch  v.  Maryland,  namely,  "That  the  power  to  tax  involves 
the  power  to  destroy." 

The  power  involved  was  one  which  had  been  exercised  by  the 
States  since  the  foundation  of  the  government,  and  had  been,  after 
the  lapse  of  three-quarters  of  a  century,  annihilated  from  excessive 
taxation  by  the  general  government,  just  as  the  judicial  office  in  the 
present  case  might  be,  if  subject,  at  all,  to  taxation  by  that  govern- 
ment. But,  notwithstanding  the  sanction  of  this  taxation  by  a 
majority  of  the  court,  it  is  conceded,  in  the  opinion,  that  "the 
reserved  rights  of  the  States,  such  as  the  right  to  pass  laws;  to  give 
effect  to  laws  through  executive  action;  to  administer  justice 
through  the  courts,  and  to  employ  all  necessary  agencies  for  legit- 
imate purposes  of  State  government,  are  not  proper  subjects  of 
the  taxing  power  of  Congress/'  This  concession  covers  the  case 
before  us,  and  adds  the  authority  of  this  court  in  support  of  the 
doctrine  which  we  have  endeavored  to  maintain. 

Mr.  Justice  BRADLEY,  dissenting. 


64  LIMITATIONS  OF  THE  TAXING  POWER. 

2.     Taxation  of  Government  Bonds. 
WESTON  ET  AL  V.  THE  CITY  COUNCIL  OF  CHARLESTON. 

Supreme  Court  of  the  United  States.     January,  1829. 
2  Peters,  449. 

Mr.  Chief  Justice  MARSHALL  delivered  the  opinion  of  the  Court. 

This  brings  us  to  the  main  question.  Is  the  stock  issued  for 
loans  made  to  the  government  of  the  United  States  liable  to  be 
taxed  by  states  and  corporations?* 

Congress  has  power  "to  borrow  money  on  the  credit  of  the 
United  States/'  The  stock  it  issues  is  the  evidence  of  a  debt 
created  by  the  exercise  of  this  power.  The  tax  in  question  is  a  tax 
upon  the  contract  subsisting  between  the  government  and  the  indi- 
vidual. It  bears  directly  upon  that  contract,  while  subsisting  and 
in  full  force.  The  power  operates  upon  the  contract  the  instant 
it  is  framed,  and  must  imply  a  right  to  affect  that  contract. 

If  the  states  and  corporations  throughout  the  Union,  possess 
the  power  to  tax  a  contract  for  the  loan  of  money,  what  shall  arrest 
this  principle  in  its  application  to  every  other  contract?  What 
measure  can  government  adopt  which  will  not  be  exposed  to  its 
influence  ? 

If  the  right  to  impose  the  tax  exists,  it  is  a  right  which  in  its 
nature  acknowledges  no  limits.  It  may  be  carried  to  any  extent 
within  the  jurisdiction  of  the  state  or  corporation  which  imposes  it, 
which  the  will  of  each  state  and  corporation  may  prescribe.  A  power 
which  is  given  by  the  whole  American  people  for  their  common 
good,  which  is  to  be  exercised  at  the  most  critical  periods  for  tho 
most  important  purposes,  on  the  free  exercise  of  which  the  inter- 
ests certainly,  perhaps  the  liberty  of  the  whole  may  depend;  may  be 
burthened,  impeded,  if  not  arrested,  by  any  of  the  organized  parts 
of  the  confederacy. 

This  subject  was  brought  before  the  court  in  the  case  of 
M'Cullough  v.  The  State  of  Maryland,  4  Wheaton  316,  when  it  was 
thoroughly  argued  and  deliberately  considered.  The  question 

The  ordinance  imposing  the  tax  under  consideration  imposed  a  tax  of 
twenty-five  cents  on  every  hundred  dollars  on-  certain  enumerated  kinds  of 
personal  property  including  "six  and  seven  per  cent  stock  of  the  United 
States." 


WESTOX  ET  AL.  V.  CHARLESTON.  65 

decided  in  that  case  bears  a  near  resemblance  to  that  which  is 
involved  in  this 

We  retain  the  opinions  which  were  then  expressed.  A  contract 
made  by  the  government  in  the  exercise  of  its  power,  to  borrow 
money  on  the  credit  of  the  United  States,  is  undoubtedly  independ- 
ent of  the  will  of  any  state  in  which  the  individual  who  lends  may 
reside,  and  is  undoubtedly  an  operation  essential  to  the  important 
objects  for  which  the  government  was  created,  It  ought,  therefore, 
on  the  principles  settled  in  the  case  of  M'Culloch  v.  The  State  of 
Maryland,  to  be  exempt  from  state  taxation,  and  consequently  from 
being  taxed  by  corporations  deriving  their  power  from  states. 

It  is  admitted  that  the  power  of  the  government  to  borrow  money 
can  not  be  directly  opposed,  and  that  any  law  directly  obstructing 
its  operation  would  be  void;  but,  a  distinction  is  taken  between 
direct  opposition  and  those  measures  which  may  consequentially 
affect  it;  that  is,  that  a  law  prohibiting  loans  to  the  United  States 
would  be  void,  but  a  tax  on  them  to  any  amount  is  allowable. 

It  is,  we  think,  impossible  not  to  perceive  the  intimate  connec- 
tion which  exists  between  these  two  modes  of  acting  on  the  subject. 

It  is  not  the  want  of  original  power  in  an  independent  sovereign 
state,  to  prohibit  loans  to  a  foreign  government,  which  restrains 
the  legislature  from  direct  opposition  to  those  made  by  the  United 
States.  The  restraint  is  imposed  by  our  Constitution.  The  Ameri- 
can people  have  conferred  the  power  of  borrowing  money  on  their 
government,  and  by  making  that  government  supreme,  have  shielded 
its  action,  in  the  exercise  of  this  power,  from  the  action  of  the 
local  governments.  The  grant  of  the  power  is  incompatible  with  a 
restraining  or  controlling  power,  and  the  declaration  of  supremacy 
is  a  declaration  that  no  such  restraining  or  controlling  power  shall 
be  exercised. 

The  right  to  tax  the  contract  to  any  extent,  when  made,  must 
operate  upon  the  power  to  borrow  before  it  is  exercised,  and  have  a 
sensible  influence  on  the  contract.  The  extent  of  this  influence 
depends  on  the  will  of  a  distinct  government.  To  any  extent,  how- 
ever inconsiderable,  it  is  a  burthen  on  the  operations  of  government. 
It  may  be  carried  to  an  extent  which  shall  arrest  them  entirely. 

It  has  been  supposed  that  a  tax  on  stock  comes  within  the  ex- 
ceptions stated  in  the  case  of  M'Cullough  v.  The  State  of  Mary- 
land. We  do  not  think  so.  The  Bank  of  the  United  States  is  an 
instrument  essential  to  the  fiscal  operations  of  the  government,  ind 
the  power  which  might  be  exercised  to  its  destruction  was  denied. 
5 


66  LIMITATIONS  OF  THE  TAXING  POWER. 

But  property  acquired  by  that  corporation  in  a  state  was  supposed 
to  be  placed  in  the  same  condition  with  property  acquired  by  an 
individual. 

The  tax  on  government  stock  is  thought  by  this  court  to  be  a 
tax  on  the  contract,  a  tax  on  the  power  to  borrow  money  on  the 
credit  of  the  United  States,  and  consequently  to  be  repugnant  to 
the  Constitution. 

We  are,  therefore,  of  opinion  that  the  judgment  of  the  Consti- 
tutional Court  of  the  State  of  South  Carolina,  reversing  the  order 
made  by  the  Court  of  Common  Pleas,  awarding  a  prohibition  to 
the  City  Council  of  Charleston,  to  restrain  them  from  levying  a 
tax  imposed  on  six  and  seven  per  cent  stock  of  the  United  States, 
under  an  ordinance  to  raise  supplies  to  the  use  of  the  city  of 
Charleston  for  the  year  1823,  is  erroneous  in  this:  that  the  said 
Constitutional  Court  adjudged  that  the  said  ordinance  was  not 
repugnant  to  the  Constitution  of  the  United  States;  whereas,  this 
Court  is  of  opinion  that  such  repugnancy  does  exist.  We  are, 
therefore,  of  opinion  that  said  judgment  ought  to  be  reversed  and 
annulled,  and  the  cause  remanded  to  the  Constitutional  Court  for 
the  State  of  South  Carolina,  that  further  proceedings  may  be  had 
therein  according  to  law. 

Mr.  Justice  JOHNSON,  dissentiente. 


BANK  OF  COMMERCE  V.  NEW  YORK  CITY. 

Supreme  Court  of  the  United  States.     December,  1862. 
2  Black,  620. 

Mr,  Justice  NELSON. 

This  is  a  writ  of  error  to  the  Court  of  Appeals  of  the  State  of 
New  York. 

The  question  involved  in  this  case  is,  whether  or  not  the  stock 
of  the  United  States,  constituting  a  part  or  the  whole  of  the  cap- 
ital stock  of  a  bank  organzed  under  the  banking  laws  of  New  York, 
is  subject  to  State  taxation.  The  capital  of  the  bank  is  taxed  un- 
der existing  laws  in  that  State  upon  valuation  like  the  property 
of  individual  citizens,  and  not  as  formerly  on  the  amount  of  the 
nominal  capital,  without  regard  to  loss  or  depreciation. 

According  to  that  system  of  taxation  it  was  immaterial  as  to  the 
character  or  description  of  property  which  constituted  the  capital, 
as  the  tax  imposed  was  wholly  irrespective  of  it. 

The  tax  was  like  one  annexed  to  the  franchise  as  a  royalty  for 


BANK   OF   COMMERCE   V.    .NEW   YORK.  i;: 

the  grant.  But  since  the  change  of  this  system  it  is  agreed  the  tax 
is  upon  the  property  constituting  the  capital. 

This  stock  then  is  held  by  the  bank  the  same  as  such  stocks  are 
held  by  individuals,  and  alike  subject  to  taxation  or  exemption  by 
State  authority.  On  the  part  of  the  bank  it  is  claimed  that  the- 
question  was  decided  in  the  case  of  Weston  et  als.  v.  The  City 
Councils  of  Charleston  (2  Peters,  449),  in  favor  of  exemption. 
In  that  case  the  stocks  were  in  the  hands  of  individuals  which  were 
taxed  by  the  city  authorities  under  a  law  of  the  State.  The  Court 
held  the  law  imposing  the  tax  unconstitutional.  This  decision 
M-ould  seem  not  only  to  cover  the  case  before  us,  but  to  determine 
the  very  point  involved  in  it. 

It  has  been  argued,  however,  that  the  form  or  mode  of  levying 
the  tax  under  the  ordinance  of  the  City  of  Charleston  was  different 
from  that  of  the  law  of  Xew  York,  and  hence  may  well  distinguish 
the  case  and  its  principles  from  the  present  one.  This  difference 
consists  in  the  circumstance  that  the  tax  in  the  former  case  was 
imposed  on  the  .stock,  eo  nomine  whereas  in  the  present  it  is  taxed 
in  the  aggregate  of  the  tax-payer's  property,  and  to  be  valued  at  it& 
real  worth  in  the  same  manner  as  all  other  items  of  his  taxable 
property.  The  stock  is  not  taxed  by  name,  and  no  discrimination 
is  made  in  favor  or  against  it,  but  is  regarded  like  any  other  se- 
curity for  money  or  chose  in  action. 

It  is  true  that  the  ordinance  imposing  the  tax  in  the  case  of 
Weston  v.  The  City  of  Charleston  did  discriminate  between  the 
stock  of  the  United  States  and  other  property — that  is,  the  ordi- 
nance did  not  purport  to  impose  a  tax  upon  all  the  property  owned 
by  the  tax-payers  of  the  City,  and  specially  excepted  certain  prop- 
erty altogether  from  taxation.  The  only  uniformity  in  the  taxation 
was  that  it  was  levied  equally  upon  the  articles  enumerated,  and 
which  were  taxed.  To  this  extent  it  might  be  regarded  as  a  tax 
on  the  stock  eo  nomine. 

But  does  this  distinction  thus  put  forth  between  the  two  casec? 
distinguish  them  in  principle?  The  argument  admits  that  a  tax 
eo  nomine,  or  one  that  distinguishes  unfavorably  the  stock  of  the 
United  States  from  the  other  property  of  the  tax-payer,  cannot  be 
upheld.  Why?  Because,  as  is  said,  if  this  power  to  discriminate 
be  admitted  to  belong  to  the  State,  it  might  be  exercised  to  the 
destruction  of  the  value  of  the  stock,  and  consequently  of  the 
power  or  function  of  the  Federal  Government  to  issue  it  for  any 
practical  uses. 

It  will  be  seen,  therefore,  that  the  distinction  claimed  rests  upon 


68  LIMITATIONS  OF  THE  TAXING  POWER. 

a,  limitation  of  the  exercise  of  the  taxing  power  of  the  State;  that 
if  the  tax  is  .imposed  indiscriminately  upon  all  the  property  of  the 
individual  or  eorporation,  the  stock  may  be  included  in  the  valua- 
tion; if  not,  it  must  be  excluded  or  cannot  be  reached. 

Upon  looking  at  the  case  of  Weston  v.  The  City  of  Charleston, 
it  will  be  seen  that  the  decision  of  a  majority  of  the  court  was  not 
at  all  placed  upon  the  distinction  we  have  been  considering,  but 
upon  ground  much  broader  and  wholly  independent  of  it. 

The  tax  upon  the  stocks  was  regarded  as  a  tax  upon  the  exer- 
cise of  the  power  of  Congress  "to  borrow  money  on  the  credit  of 
the  United  States/'  The  exercise  of  this  power  was  interfered 
with  to  the  extent  of  the  tax  imposed  by  the  City  authorities,  that 
the  liability  of  the  certificates  of  stock  to  taxation  by  a  State  in 
the  hands  of  an  individual  affected  their  value  in  the  market,  and 
the  free  and  unrestrained  exercise  of  the  power.  The  Chief  Jus- 
tice observes,  that  "if  the  right  to  impose  a  tax  exists,  it  is  a  right 
which,  in  its  nature  acknowledges  no  limits.  It  may  be  carried  to 
any  extent  within  the  jurisdiction  of  the  State  or  corporation  which 
imposes  it,  which  the  will  of  each  State  or  corporation  may  pre- 
scribe. 

It  is  apparent  in  studying  this  opinion  in  connection  with  the 
opinions  of  the  Court  in  the  cases  of  McCullough  v.  The  State  of 
Maryland  (4  Wh.,  llf.),  and  of  Osborne  v.  The  United  States 
(9  Wh.,  732),  that  it  is  but  a  corollary  from  the  doctrines  so  ably 
expounded  by  the  Chief  Justice  in  the  two  previous  cases  in  the 
interpretation  of  an  analogous  power  in  the  Constitution. 

The  doctrine  maintained  in  those  cases  is,  that  the  powers 
granted  by  the  people  of  the  States  to  the  General  Government, 
and  embodied  in  the  Constitution,  are  supreme  within  their  scope 
and  operation,  and  that  this  Government  may  exercise  these  pow- 
ers in  its  appropriate  departments,  free  and  unobstructed  by  any 
State  legislation  or  authority.  That  within  this  limit  this  Govern- 
ment is  sovereign  and  independent,  and  any  interference  by  the 
State  governments,  tending  to  the  interruption  of  the  full  legiti- 
mate exercise  of  the  powers  thus  granted,  is  in  conflict  with  that 
clause  of  the  Constitution  which  makes  the  Constitution  and  the 
laws  of  the  United  States  passed  in  pursuance  thereof  "the  su- 
preme law  of  the  land." 

The  result  of  this  doctrine  is,  that  the  exercise  of  any  authority 
by  a  State  Government  trenching  upon  any  of  the  powers  granted 


HOME  INSURANCE  CO.  V.  NEW  YORK.  69 

to  the  General  Government  is,  to  the  extent  of  the  interference,  an 
attempt  to  resume  the  grant  in  defiance  of  constitutional  obligation; 
and  more  than  this,  if  the  encroachment  or  usurpation  to  any  ex- 
tent is  admitted,  the  principle  involved  would  carry  the  exercise  of 
the  authority  of  the  State  to  an  indefinite  limit,  even  to  the  de- 
struction of  the  power.  For,  as  truly  said  by  the  Chief  Justice  in 
the  case  of  Weston  v.  The  City  of  Charleston,  in  respect  to  the 
taxing  power  of  the  State,  "if  the  right  to  impose  the  tax  exists, 
it  is  a  right  which,  in  its  nature,  acknowledges  no  limit,  it  may 
be  carried  to  any  extent  within  the  jurisdiction  of  the  State  or 
corporation  which  imposes  it,  which  the  will  of  each  State  and  cor- 
poration may  prescribe." 

The  case  in  hand  is  an  illustration.     The  power  to 

borrow  money  on  the  credit  of  the  United  States  is  admitted.  It  is 
one  of  the  most  important  and  even  vital  functions  of  the  General 
Government  and  its  exercise  a  means  of  supplying  the  necessary 
resources  to  meet  exigencies  in  times  of  peace  or  war.  But  of 
what  avail  is  the  function  or  the  means  if  another  Government 
may  tax  it  at  discretion.  It  is  apparent  that  the  power,  function, 
or  means,  however  important  and  vital,  are  at  the  mercy  of  that 
Government.  And  it  must  be  always  remembered,  if  the  right  to 
impose  a  tax  at  all  exists  on  the  part  of  the  other  Government,  "it 
id  a  right  which  in  its  nature  acknowledges  no  limits.''  And  the 
principle  is  equally  true  in  respect  to  every  other  power  or  function 
of  a  Government  subject  to  the  control  of  another. 


HOME   INSURANCE   CO.  V.  NEW  YORK  STATE. 

Supreme  Court  of  the   United  States.     April,  1890. 
134   United  States,  594. 

The  plaintiff  in  error,  The  Home  Insurance  Company  of  New 
York,  is  a  corporation  created  under  the  laws  of  that  State.  Its 
capital  stock  during  the  year  1881  was  three  millions  of  dollars, 
divided  into  thirty  thousand  shares  of  the  par  value  of  one  hundred 
dollars  each,  all  fully  paid.  In  the  months  of  January  and  July 
of  that  year  a  dividend  of  $150,000  was  declared  by  the  company, 
making  together  ten  per  cent  upon  the  par  value  of  its  stock.  A 
portion  of  that  capital  stock  was  invested  in  bonds  of  the  United 
States,  amounting,  when  the  dividend  was  declared  in  July,  1881, 
and  also  on  the  first  of  November  of  that  year,  to  $1,940,000. 


70  LIMITATIONS  OF  THE  TAXING  POWER. 

By  an  act  of  the  legislature  of  New  York,  passed  May  26,  1881, 
c.  361,  amending  a  previous  act  providing  for  the  taxation  of  cer- 
tain corporations,  joint  stock  companies  and  associations,  it  wa» 
declared  that  every  corporation,  joint  stock  company  or  association, 
then  or  thereafter  incorporated  under  any  law  of  the  State,  or  of 
any  other  State  or  country,  and  doing  business  in  the  State,  with 
certain  designated  exceptions  not  material  in  this  case,  should  be 
subject  to  a  tax  upon  "its  corporate  franchise  or  business." 

The  tax  payable  by  the  Home  Insurance  Company,  estimated  ac- 
cording to  its  dividends,  under  the  above  law  of  the  State,  aggre- 
gated $7,500 

Mr.  Justice  FIELD,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

The  contention  of  the  plaintiff  in  error  is  that  the  tax  in  ques- 
tion was  levied  upon  its  capital  stock,  and  therefore  invalid  so  far 
as  the  bonds  of  the  United  States  constitute  a  part  of  that  stock. 
If  that  contention  were  well  founded  there  would  be  no  question  as 
to  the  invalidity  of  the  tax.  That  the  bonds  or  obligations  of  the 
United  States  for  the  payment  of  money  cannot  be  the  subject  of 
taxation  by  a  State  is  familiar  law  settled  by  numerous  adjudica- 
tions of  this  Court.  It  is  a  tax  upon  the  exercise  of  the  power  of 
Congress  to  borrow  money ;  a  tax  which,  if  permitted,  could  be 
limited  in  amount  only  by  the  discretion  of  the  State,  and  might 
therefore  be  carried  to  an  extent  impairing,  if  not  destructive  of, 
the  efficiency  of  the  power,  to  the  serious  detriment  of  the  general 
government. 

Nor  can  this  inhibition  upon  the  States  be  evaded  by  any  change 
in  the  mode  or  form  of  the  taxation,  provided  the  same  result  is 
effected — that  is,  an  impediment  is  thereby  interposed  to  the  exer- 
cise of  a  power  of  the  United  States.  That  which  cannot  be  ac- 
complished directly  cannot  be  accomplished  indirectly.  Through 
all  such  attempts  the  court  will  look  to  the  end  sought  to  be 
reached,  and  if  that  would  trench  upon  a  power  of  the  Government, 
the  law  creating  it  will  be  set  aside  or  its  enforcement  restrained. 

Looking  now  at  the  tax  in  this  case  upon  the  plaintiff  in  error, 
we  are  unable  to  perceive  that  it  falls  within  the  doctrines  of  any 
of  the  cases  cited,  to  which  we  fully  assent,  not  doubting  their 
correctness  in  any  particular.  It  is  not  a  tax  in  terms  upon  the 
capital  stock  of  the  company,  nor  upon  any  bonds  of  the  United 


HOME  INSURANCE  CO.  V.  NEW  YOEK.  71 

States  composing  a  part  of  that  stock.  The  statute  designates  it  a 
tax  upon  the  "corporate  franchise  or  business"  of  the  company, 
and  reference  is  only  made  to  its  capital  stock  and  dividends  for 
the  purpose  of  determining  the  amount  of  the  tax  to  be  exacted 
each  year. 

By  the  term  "corporate  franchise  or  business,"  as  here  used,  we 
understand  is  meant  (not  referring  to  corporations  sole,  which  arc 
not  usually  created  for  commercial  business)  the  right  or  privilege 
given  by  the  State  to  two  or  more  persons  of  being  a  corporation — 
that  is,  of  doing  business  in  a  corporate  capacity,  and  not  the  privi- 
lege or  franchise  which,  when  incorporated,  the  company  may  exer- 
cise. The  right  or  privilege  to  be  a  corporation,  or  to  do  business 
as  such  body,  is  one  generally  deemed  of  value  to  the  corporators, 
or  it  would  not  be  sought  in  such  numbers  as  at  present.  It  is  a 
right  or  privilege  by  which  several  individuals  may  unite  them- 
selves under  a  common  name  and  act  as  a  single  person,  with  a 
succession  of  members,  without  dissolution  or  suspension  of  business 
and  with  a  limited  individual  liability.  The  granting  of  such  right 
or  privilege  rests  entirely  in  the  discretion  of  the  State,  and,  of 
course,  when  granted,  may  be  accompanied  with  such  conditions 
as  its  legislature  may  judge  most  befitting  to  its  interests  and 
policy.  It  may  require,  as  a  condition  of  the  grant  of  the  fran- 
chise, and  also  of  its  continued  exercise,  that  the  corporation  pay  a 
specific  sum  to  the  State  each  year,  or  month,  or  a  specific  portion 
of  its  gross  receipts,  or  of  the  profits  of  its  •  business,  or  a  sum  to 
be  ascertained  in  any  convenient  mode  which  it  may  prescribe.  The 
validity  of  the  tax  can  in  no  way  be  dependent  upon  the  mode 
which  the  State  may  deem  fit  to  adopt  in  fixing  the  amount  for 
any  year  which  it  will  exact  for  the  franchise.  No  constitutional 
objection  lies  in  the  way  of  a  legislative  body  prescribing  any  mode 
of  measurement  to  determine  the  amount  it  will  charge  for  the 
privileges  it  bestows.  It  may  well  seek  in  this  way  to  increase  its 
revenue  to  the  extent  to  which  it  has  been  cut  off  by  exemption 
of  other  property  from  taxation.  As  its  revenues  to  meet  expenses 
are  lessened  in  one  direction,  it  may  look  to  any  other  property  as 
sources  of  revenue,  which  is  not  exempted  from  taxation.  Its  action 
in  this  matter  is  not  the  subject  of  judicial  inquiry  in  a  federal 
tribunal. 

If  any  hardship  or  oppression  is  created  by  the 

amount  exacted,  the  remedy  must  be  sought  by  appeal  to  the  Legis- 
lature of  the  State;  it  cannot  be  furnished  by  the  federal  tribunals. 

The  tax  in  the  present  case  would  not  be  affected  if  the  nature 


72  LIMITATIONS  OF  THE  TAXING  POWER. 

of  the  property  in  which  the  whole  capital  stock  is  invested  were 
changed  and  put  into  real  property  or  bonds  of  New  York,  or  oi' 
other  States.  From  the  very  -nature  of  the  tax,  being  laid  upon  a 
franchise  given  by  the  state,  and  revocable  at  pleasure,  it  cannot  be 
affected  in  any  way  by  the  character  of  the  property  in  which  its 
capital  stock  is  invested.  The  power  of  the  State  over  the  cor- 
porate franchise  and  the  condition  upon  which  it  shall  be  exer- 
cised, is  as  ample  and  plenary  in  the  one  case  as  in  the  other. 

This  doctrine  of  the  taxability  of  the  franchises  of  a  corporation 
without  reference  to  the  character  of  the  property  in  which  its  cap- 
ital stock  or  its  deposits  are  invested  is  sustained  by  the  judg- 
ments in  Society  for  Savings  v.  Coite,  6  Wall.  594,  and  Provident 
Institution  v.  Massachusetts,  6  Wall.  611,  which  were  before  this 
Court  at  December  Term,  1867.  In  the  first  of  these  cases  it  ap- 
peared that  a  law  of  Connecticut  of  1863  provided  that  savings 
banks  in  that  State  should  make  an  annual  return  to  the  controller 
of  public  accounts  "of  the  total  amounts  of  all  deposits  in  them,  re- 
spectively, on  the  first  day  of  July  in  each  successive  year,"  and 
should  pay  to  the  treasurer  of  the  State  a  sum  equal  to  three- 
fourths  of  one  per  cent  on  the  total  amount  of  deposits  in  such 
banks  on  those  days,  and  that  the  tax  should  be  in  lieu  of  all  other 
taxes  upon  the  banks  or  their  deposits.  On  the  first  day  of  July, 
18G3,  the  Society  for  Savings,  one  of  the  banks,  had  invested  over 
$500,000  of  its  deposits  in  securities  of  the  United  States,  which 
were  declared  by  Congress  to  be  exempted  from  taxation  by  state 
authority,  whether  held  by  individuals,  corporations,  or  associa- 
tions. 12  Stat.  346,  c.  33,  §  2.  Upon  the  amount  of  its  deposits 
thus  invested  the  society  refused  to  pay  the  sum  equal  to  the  pre- 
scribed percentage.  In  a  suit  brought  by  the  treasurer  of  the  State- 
to  recover  the  tax,  the  payment  of  which  was  thus  refused,  the 
Supreme  Court  of  Connecticut  held  that  the  tax  was  not  on  prop- 
erty but  on  the  corporation  as  such.  The  case  being  brought  here, 
the  judgment  was  affirmed,  this  Court  holding  that  the  tax  was 
on  the  franchise  of  the  corporation  and  not  upon  its  property,  and 
the  fact  that  a  part  of  the  deposits  was  invested  in  securities  of 
the  United  States  did  not  exempt  the  society  from  the  tax.  Said 
the  Court:  "Nothing  can  be  more  certain  in  legal  decision  than 
that  the  privileges  and  franchises  of  a  private  corporation,  and  all 
trades  and  avocations  by  which  the  citizens  acquire  a  livelihood,  may 
be  taxed  by  a  State  for  the  support  of  the  State  Government.  Au- 
thority to  that  effect  resides  in  the  State  independent  of  the  federal 


HOME  INSURANCE  CO.  V.  NEW  YORK.  73 

government,  and  is  wholly  unaffected  by  the  fact  that  the  corpora- 
tion or  individual  has  or  has  not  made  investment  in  federal  securi- 
ties." Pages  606-607. 

It  was  contended  in  that  case  that  the  deposits  in  the  bank  were 
subjected  to  taxation  from  the  fact  that  the  extent  of  the  tax  was 
determined  by  their  amount.  But  the  court  said:  "Reference  is 
evidently  made  to  the  total  amount  of  deposits  on  the  day  named, 
not  as  the  subject  matter  for  assessment,  but  as  the  basis  for  com- 
puting the  tax  required  to  be  paid  by  the  corporation  defendants. 
They  enjoy  important  privileges,  and  it  is  just  that  they  should 
contribute  to  the  public  burdens.  Views  of  the  defendants  are, 
that  the  sums  required  to  be  paid  to  the  treasury  of  the  State  is  a 
tax  on  the  assets  of  the  institution,  but  there  is  not  a  word  in 
the  provision  which  gives  any  satisfactory  support  to  that  proposi- 
tion. Different  modes  of  taxation  are  adopted  in  different  States, 
and  even  in  the  same  State  at  different  periods  of  their  history. 
Fixed  sums  are  in  some  instances  required  to  be  annually  paid 
into  the  treasury  of  the  State,  and  in  others  a  prescribed  percentage 
is  levied  on  the  stock,  assets  or  property  owned  or  held  by  the 
corporation,  while  in  others  the  sum  required  to  be  paid  is  left 
indefinite,  to  be  ascertained  in  some  mode  by  the  amount  of  busi- 
ness which  the  corporation  shall  transact  within  a  definite  period. 
Experience  shows  that  the  latter  mode  is  better  calculated  to  effect 
justice  among  the  corporations  required  to  contribute  to  the  public 
burdens  than  any  other  which  has  been  devised,  as  its  tendency  b 
to  graduate  the  required  contribution  to  the  value  of  the  privileges 
granted  and  to  the  extent  of  their  exercise.  Existence  of  the  power 
is  beyond  doubt,  and  it  rests  in  the  discretion  of  the  Legislature 
whether  they  will  levy  a  fixed  sum,  or  if  not,  to  determine  in  what 
manner  the  amount  shall  be  ascertained."  P.  608. 

In  the  second  case  mentioned,  Provident  Institution  v.  Massa- 
chusetts, it  appeared  that  the  statute  of  Massachusetts,  passed  in 
1862,  levying  taxes  on  certain  insurance  companies  and  depositor^ 
in  savings  banks,  provided  that  every  institution  for  savings  incor- 
porated under  its  laws  should  pay  to  the  commonwealth  a  tax  of 
one-half  of  one  per  cent  per  annum  on  the  amount  of  its  deposits, 
to  be  assessed  one-half  of  said  annual  tax  on  the  average  amount 
of  its  deposits  for  the  six  months  preceding  the  1st  day  of  May, 
and  the  other  half  on  the  average  amount  of  its  deposits  for  the 
six  months  preceding  the  1st  day  of  November.  The  Provident 
Institution  for  Savings  in  that  State  was  authorized  to  invest  its 
deposits  in  securities  of  the  United  States.  Its  average  amount  of 


74  LIMITATIONS  OF  THE  TAXING  POWER. 

deposits  for  the  six  months  preceding  the  1st  day  of  May,  1865, 
was  over  eight  millions,  of  which  over  one  million  was  invested  in 
such  securities.  It  paid  all  the  taxes  demanded  except  on  the  por- 
tion which  was  thus  invested.  Upon  that  it  declined  to  pay  the 
tax.  In  a  suit  brought  by  the  commonwealth  to  recover  the  same, 
the  Supreme  Judicial  Court  of  the  State  held  that  the  tax  was  one 
on  the  franchise  of  the  company  and  not  on  the  property,  and 
therefore  gave  judgment  for  the  commonwealth.  The  case  being 
brought  here,  the  judgment  was  affirmed.  In  deciding  the  case,  this- 
court  said,  referring  to  a  section  of  the  statute  under  which  the 
1  tax  was  levied:  "Deposits,  as  the  word  is  employed  in  that  section, 
are  the  sums  received  by  the  institution  from  depositors,  without 
regard  to  the  nature  of  the  funds.  They  are  not  capital  stock  in 
any  sense,  nor  are  they  even  investments,  as  the  word  is  there 
used,  which  simply  *means  the  sums  received  wholly  irrespective  of 
the  disposition  made  of  the  same,  or  their  market  value."  And 
speaking  of  the  difference  existing  between  taxes  on  franchises 
and  taxes  upon  property  it  said:  "Franchise  taxes  are  levied 
directly  by  an  act  of  the  legislature,  and  the  corporations  are  re- 
quired to  pay  the  amount  into  the  state  treasury.  They  differ 
from  property  taxes  as  levied  for  state  and  municipal  purposes  in 
the  basis  prescribed  for  computing  the  amount,  in  the  manner  of 
assessment,  and  in  the  mode  of  collection."  And  again,  "Compara- 
tive valuation  in  assessing  property  taxes  is  the  basis  of  computation 
in  ascertaining  the  amount  to  be  contributed  by  an  individiual,  but 
the  amount  of  a  franchise  tax  depends  upon  the  business  trans- 
acted by  the  corporation  and  the  extent  to  which  they  have  exer- 
cised the  privileges  granted  in  their  charter."  Pages  631,  632. 

In  Hamilton  Company  v.  Massachusetts,  6  Wall.  632,  a  statute 
of  Massachusetts  which  required  corporations  having  a  capital  stock 
divided  into  shares,  to  pay  a  tax  of  a  certain  percentage  upon  the 
excess  of  the  market  value  of  such  stock  over  the  value  of  its  real 
estate  and  machinery,  was  sustained  as  a  statute  imposing  a  fran- 
chise tax,  notwithstanding  a  portion  of  the  property  consisted  of 
securities  of  the  United  States;  this  court,  however,  placing  its 
decision  upon  the  fact  that  under  the  provisions  of  the  State  con- 
stitution and  the  practice  under  it  the  tax  had  been  so  considered 
by  the  highest  tribunal  of  the  State.  This  decision  goes  much 
farther  than  is  necessary  to  sustain  the  judgment  of  the  Court  of 
Appeals  of  New  York  in  the  present  case. 

In  this  case  we  hold,  as  well  upon  general  principles  a?  upon  the 


PLUMMEH  V.  COLER.  75 

authority  of  the  first  two  cases  cited  from  6th  Wallace,  tliat  the 
tax  for  which  the  suit  is  brought  is  not  a  tax  on  the  capital  stock 
or  property  of  the  company,  but  upon  its  corporate  franchise,  and 
is  not  therefore  subject  to  the  objection  stated  by  counsel,  because 
a  portion  of  its  capital  stock  is  invested  in  securities  of  the  United 
States 

Mr  Justice  MILLER  (with  whom  concurred  Mr.  Justice  HARLAN) 
dissenting. 

Mr.  Justice  Harlan  and  myself  dissent  from  the  judgment  in 
this  case,  because  we  think  that,  notwithstanding  the  peculiar 
language  of  the  statute  of  Xew  York,  the  tax  in  controversy  is,  in 
effect,  a  tax  upon  bonds  of  the  United  States  held  by  the  insurance 
company. 

This  is  not  the  rule,  however  in  Pennsylvania  where  the  courts  hold  that 
a  tax  on  a  corporation  based  in  amount  on  a  valuation  of  its  stock  is  a  tax  on 
the  stock  and  may  not  be  levied  on  that  portion  of  the  stock  which  is  in- 
vested in  United  States  securities  exempted  by  law  of  Congress  from  taxa- 
tion. Fox's  Appeal  112  Pa.  State  354.  A  tax  on  the  franchise  of  a  domestic 
corporation  measured  by  the  value  of  its  patent  rights  where  such  rights  were 
its  only  property,  is  proper.  People  ex  rel  U.  S.  Aluminum  Printing  Co.  v. 
Knight  171  N.  Y.  475,  overruling  People  ex  rel  Johnson  Co.  v.  Roberts,  159 
N.  Y.  70,  holding  to  the  opposite  rule  in  the  case  of  a  corporation  whose 
property  was  copyrights.  A  tax  on  the  shareholders  of  national  banks  without 
deduction  for  amount  of  United  States  bonds  owned  by  the  bank  is  proper, 
Van  Allen  v.  The  Assessors,  3  Wallace  573. 


PLUMMER  V.  COLER. 

Supreme  Court  of  the  United  States.     October,  1899. 
178  United  States  115. 

Joseph  Plummer,  a  citizen  and  resident  of  New  York,  died  Octo- 
ber 28,  1898,  leaving  a  last  will  whereby  he  bequeathed  to  Harry 
Plummer,  his  executor,  forty  thousand  dollars  in  United  States 
bonds,  issued  under  the  funding  act  of  1870,  in  trust,  to  hold  the 
same  during  the  life  time  of  Ella  Plummer  Brown,  daughter  of 
the  testator,  and  to  pay  the  income  thereof  to  her  during  her  life, 
and  at  her  death  to  divide  the  same  between  and  amongst  her  issue 
then  living. 

The  value  of  this  life  interest  was  computed  by  the  appraisers  at 
the  sum  of  $16,120,  and  a  tax  of  $161.20  was  imposed  thereon  by 
the  surrogate  of  the  county  of  New  York.  From  this  appraisal  and 
the  order  imposing  the  tax  an  appeal  was  taken  to  the  Surrogate's 
Court  of  the  county  and  State  of  Xew  York. 


76  LIMITATIONS  OF  THE  TAXING  TOWER. 

On  December  22,  1899,  the  Surrogate's  Court  affirmed  the  ap- 
praisal and  the  order  imposing  a  tax.  Thereupon  Harry  Plummer, 
executor,  appealed  to  the  appellate  division  of  the  Supreme  Court 
of  the  State  of  New  York,  which  court  on  January  5,  1900, 
affirmed  the  order  of  the  surrogate  and  the  decree  of  the  Surro- 
gate's Court.  From  this  decree  of  the  appellate  division  of  the  Su- 
preme Court  an  appeal  was  taken  to  the  Court  of  Appeals  of  the 
State  of  Xew  York,  where,  on  January  8,  1900,  the  proceedings  and 
order  of  the  surrogate  and  the  decree  of  the  appellate  division  were 
affirmed. 

In  the  notice  of  appeal  to  the  Surrogate's  Court  and  in  that  of 
the  appeal  to  the  Court  of  Appeals  the  grounds  of  appeal  were 
stated  to  be  the  invalidity  of  the  statute  of  New  York  purporting 
to  impose  a  tax  upon  a  transfer  by  legacy  of  bonds  of  the  United 
States,  and  the  invalidity  of  the  statute,  of  the  State  of  New  York 
and  of  the  authority  exercised  thereunder  by  the  appraiser  and 
the  surrogate,  in  ?o  far  as  United  States  bonds  were  concerned. 
And  the  appellant  specially  set  up  and  claimed  a  title,  right,  privi- 
lege and  immunity  under  the  constitution  of  the  United  States  in 
respect  to  the  exemption  of  said  bonds  from  state  taxation  in  any 
form. 

Mr.  Justice  SHIRAS,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

In  this  case  we  are  called  upon  to  consider  the  question  whether, 
under  the  inheritance  tax  laws  of  a  State,  a  tax  may  be  validly  im- 
posed on  a  legacy  consisting  of  United  States  bonds  issued  under  a 
statute  declaring  them  to  be  exempt  from  state  taxation  in  any 
form. 

It  is  not  open  to  question  that  a  State  cannot,  in  the  exercise  of 
the  power  of  taxation,  tax  obligations  of  the  United  States.  Wes- 
ton  v.  Charleston,  2  Pet.,  449;  Panic  of  Commerce  v.  New  York- 
City,  2  Black.,  620;  Home  Insurance  Company  v.  New  York,  134 
V.  S.,  594,  598. 

So,  likewise,  it  is  settled  law  that  bonds  issued  by  a  State,  or 
under  its  authority  by  its  public  municipal  bodies,  are  not  taxable 
by  the  United  States.  Mercantile  Bank  v.  New  York,  121  U.  S., 
138;  Pollock  v.  Farmers'  Loan  and  Trust  Co.  157  U.  S.,  429,  583. 

\Yith  these  concessions  made,  we  are  brought  to  the  pivotal  ques- 
tion in  the  case,  and  that  question  is  thus  presented  in  the  second 
point  discussed  in  the  brief  filed  for  the  plaintiff  in  error.  "If  the 
question  of  the  right  of  the  State  to  impose  the  tax  now  in  question 


PLUMMER  V.  COLER.  77 

be  considered  merely  with  reference  to  the  inherent  lack  of  power 
of  the  State  to  impose  such  a  tax,  because  of  the  provisions  of  the 
Constitution  of  the  United  States  bearing  upon  that  question,  with- 
out any  aid  from  the  statute  of  the  United  States  under  which 
these  bonds  were  issued,  or  the  exemption  clause  contained  in  the 
bonds,  we  conceive  it  to  be  entirely  clear  that  the  tax  in  question 
is  unconstitutional,  because  impairing  and  burdening  the  borrowing 
power  of  the  United  States."  Or,  as  stated  elsewhere  in  the  brief: 
"The  States  have  no  power  to  impose  any  tax  or  other  burden 
which  would  have-  the  effect  to  prevent  or  hinder  the  Government 
of  the  United  States  from  borrowing  such  amounts  of  money  as  it 
may  require  for  its  purposes,  on  terms  as  beneficial  and  favorable 
to  itself,  in  all  respects,  as  it  could  do  if  no  such  tax  were  im- 
posed by  the  State." 

It  will  be  observed  that  these  propositions  concede  that  the  tax 
law  of  the  State  of  Xew  York  in  question,  does  not  expressly,  or 
by  necessary  implication,  propose  to  tax  federal  securities.  It  is 
only  when  and  if,  in  applying  that  law  to  the  estates  of  decedents, 
such  estates  are  found  to  consist  wholly  or  partly  of  United  State* 
bonds,  that  the  reasoning  of  the  plaintiff  in  error,  assailing  the 
validity  of  the  statute,  can  have  any  application.  And  the  con- 
tention is  that  individuals,  in  forming  or  creating  their  estates, 
will  or  may  be  deterred  from  offering  terms,  in  the  purchasing  of 
such  bonds,  as  favorable  as  they  otherwise  might  do,  if  they  are 
bound  to  know  that  such  portion  of  their  estates  of  such  bonds  is 
to  be  included,  equally  with  other  property,  in  the  assessment  of 
an  inheritance  tax. 

Before  addressing  ourselves  directly  to  the  discussion  of  these 
propositions  we  shall  briefly  review  the  decisions  in  whose  light 
they  must  be  determined. 

And,  first,  what  is  the  voice  of  the  state  courts? 

The  decision  of  the  state  courts  may  be  summarized  by  the 
statement  that  it  is  competent  for  the  legislature  of  a  State  to 
impose  a  tax  upon  the  franchises  of  the  corporations  of  the  State, 
and  upon  the  estates  of  decedents  resident  therein,  and  in  assess- 
ing such  taxes  and  as  a  basis  to  establish  the  amount  of  such  as- 
sessments, to  include  the  entire  property  of  such  corporations  and 
decedents,  although  composed,  in  whole  or  in  part,  of  United 
States  bonds;  and  that  the  theory  upon  which  this  can  be  done 'con- 
sistently with  the  Constitution  and  laws  of  the  United  States  is 
that  such  taxes  are  to  be  regarded  as  imposed,  not  upon  the  prop- 


78  LIMITATIONS  OF  THE  TAXING  POWER. 

erty,  the  amount  of  which  is  referred  to  as  regulating  the  amount 
of  the  taxes,  but  upon  franchises  and  privileges  derived  from  the 
State. 

Let  us  now  proceed  to  a  similar  survey  of  the  federal  authorities 
on  this  subject. 

Mager  v.  Grima,  8  How.,  490,  was  a  case  where,  by  the  law  oi' 
Louisiana,  a  tax  of  ten  per  cent  was  imposed  on  legacies,  when  the 
legatee  is  neither  a  citizen  of  the  United  States  nor  domiciled  in 
that  State,  and  the  executor  of  the  deceased  or  other  person  charged 
with  the  administration  of  the  estate  was  directed  to  pay  the  tax 

to  the  state  treasurer The  validity  of  the  act  was 

sustained  by  the  state  courts  and  the  cause  was  brought  to  this  court. 
The  judgment  of  the  state  court  was  here  affirmed. 

In  Van  Allen  v.  The  Assessors,  3  Wall.  573,  it  was  held  that  it 
was  competent  for  Congress  to  authorize  the  States  to  tax  the  shares 
of  banking  associations  organized  under  the  act  of  June  3,  1864, 
without  regard  to  the  fact  that  a  part  or  the  whole  of  the  capital 
of  such  association  was  invested  in  national  securities  declared  by 
the  statutes  authorizing  them  to  be  "exempt  from  taxation  by  or 
under  state  authority."  This  decision  has  ever  since  been  acted 
upon,  and  its  authority  has  never  been  questioned  by  any  court, 
and  from  it  we  learn  that  there  is  no  undeviating  policy  that,  at  all 
times  and  in  all  circumstances,  the  tax  systems  of  the  States  shall 
not  extend  to  Federal  securities. 

The  next  cases  to  be  noted  are:  Society  for  Savings  v.  Coite,  6 
Wall.,  594;  Provident  Insurance  Co.  v.  Massachusetts,  6  Wall., 
Gil;  and  Hamilton  Company  v.  Massachusetts,  6  Wall.,  632. 

In  these  cases  this  court  affirmed  the  Supreme  Courts  of  Con- 
necticut and  Massachusetts  in  holding  that  state  taxes  may  be  im- 
posed, the  amount  of  which  may  be  determined  by  the  aggregate 
amount  of  the  property  or  capital  stock  of  banking  and  manufac- 
turing companies,  even  if  such  property  or  capital  stock  include? 
United  States  bonds  issued  under  a  statute  declaring  them  exempt 
from  taxation  under  state  authority 

Next  worthy  of  notice  is  the  case  of  Home  Insurance  Co.  v.  New 
York,  134  U.  S.,  594.  It  came  here  on  error  to  the  Supreme 
Court  of  the  State  of  New  York,  whose  judgment  had  been  affirmed 
in  the  Court  of  Appeals,  and  was  twice  argued.  The  question  con- 
sidered was  whether  a  statute  of  the  State  of  New  York  was  valid 
in  respect  to  imposing  a  tax  upon  a  New  York  corporation,  meas- 
ured and  regulated  by  the  amount  of  its  annual  dividends,  where 


PLUMMER  V.  COLER.  79 

those  dividends  were  partly  composed  of  interest  of  United  States 
bonds  owned  by  the  corporation. 

In  this  court  the  question  was  elaborately  argued, 

as  may  be  seen  in  the  first  report  of  the  case  in  119  U.  S.,  121);  and 
it  was  again  contended  that  the  case  fell  within  the  principle  of 
public  policy  that  the  States  have  no  power,  .by  taxation  or  other- 
wise, to  retard,  impede,  burden  or  in  any  manner  control  the  opera- 
tions of  the  instrumentalities  of  the  national  government,  and 
also  that  the  tax  in  question  was  repugnant  to  the  Fourteenth 
Amendment  of  the  Constitution  of  the  United  States. 

The  reasoning  of  the  State  Court  was  substantially  approved  and 
their  judgment,  sustaining  the  validity  of  the  state  statute,  was 
affirmed. 

•  •••••••*• 

In  United  States  v.  Perkins,  163  U.  S.  625,  the  question  was 
whether  personal  property  bequeathed  by  will  to  the  United  States 
was  subject  to  an  inheritance  tax  under  the  law  of  the  State  of 
New  York. 

The  facts  of  the  case  were  that  one  William  W.  Merriam,  a 
resident  of  the  State  of  New  York,  left  a  last  will  and  testament, 
by  which  he  devised  and  bequeathed  all  his  estate,  real  and  per- 
sonal, to  the  United  States.  The  surrogate  assessed  an  inheritance 
tax  of  $3,964.23  upon  the  personal  property  included  in  said  be- 
quest. Upon  appeal  to  the  general  term  of  the  Supreme  Court  the 
order  of  the  Surrogate's  Court  was  affirmed,  and  upon  a  further 
appeal  to  the  Court  of  Appeals  the  judgment  of  the  Supreme  Court 
was  affirmed,  and  the  cause  was  brought  to  this  court. 

It  was  contended  that,  upon  principle,  property  of  the  United 
States  was  not  subject  to  State  taxation;  but  it  was  held  by  this 
court,  affirming  the  judgment  of  the  courts  below,  that  the  tax 
was  not  open  to  the  objection  that  it  was  an  attempt  to  tax  the 
property  of  the  United  States,  since  the  tax  was  imposed  upon  the 
legacy  before  it  reached  the  hands  of  the  legatee;  that  the  legacy 
became  the  property  of  the  United  States  after  it  had  suffered  a 
diminution  to  the  amount  of  the  tax,  and  that  it  was  only  upon 
such  a  condition  that  the  legislature  assented  to  a  bequest  of  it. 

One  of  the  propositions  recognized  in  that  case  applicable  to  the 
present  one  is  that  a  state  tax  that  would  be  invalid  if  imposed 
directly  on  a  legacy  to  the  United  States,  may  be  valid  if  the 
amount  of  the  tax  is  taken  out  of  the  legacy  before  it  reaches  the 
hands  of  the  government — the  theory  of  such  a  view  apparently 
being  that  the  property  rights  of  the  government  do  not  attach  until 


80  LIMITATIONS  OF  THE  TAXING  POWEK. 

after  the  tax  has  been  paid,  or  until  the  condition  imposed  by  the 
tax  law  of  the  State  has  been  complied  with.  Such  is  also  the  case 
in  respect  to  the  legacy  to  Ella  Plummer  Brown,  as  the  statute  in 
question  distinctly  makes  it  the  duty  of  the  executor  to  pay  the 
amount  of  the  tax  before  the  legacy  passed  to  the  legatee. 

In  closing  our  review  of  the  federal  decisions  the  case  of  Wallace 
v.  Myers,  38  Fed.  Rep.  184,  may  be  properly  referred  to,  especially 
as  it  has  been  cited  with  approval  by  this  Court  in  United  States  v. 
Perkins,  163  U.  S.,  625,  629. 

The  question  involved  was  the  very  one  we  are  now  considering, 
namely,  the  validity  of  the  inheritance  tax  law  of  the  State  of  New 
York  when  applied  to  a  legacy  consisting  of  United  States  bonds. 
In  his  opinion  Circuit  Judge  Wallace  reviewed  many  of  the  state 
and  Federal  decisions  heretofore  referred  to,  and  reached  the  con- 
clusion that  the  tax  was  to  be  regarded  as  imposed,  not  upon  the 
bonds,  but  upon  the  privilege  of  acquiring  property  by  will  or  in- 
heritance, and  that  where  the  property  of  the  decedent  included 
United  States  bonds,  the  tax  may  be  assessed  upon  the  basis  of  their 
value. 

We  think  the  conclusion,  fairly  to  be  drawn  from  the  state  and 
Federal  cases,  is,  that  the  right  to  take  property  by  will  or  descent 
is  derived  from  and  regulated  by  municipal  law;  that,  in  assessing 
a  tax  upon  such  right  or  privilege,  the  State  may  lawfully  measure 
or  fix  the  amount  of  the  tax  by  referring  to  the  value  of  the  prop- 
erty passing;  and  that  the  incidental  fact  that  such  property  is 
composed,  in  whole  or  in  part,  of  Federal  securities,  does  not  in- 
validate the  tax  or  the  law  under  which  it  is  imposed. 

Passing  from  the  authorities,  let  us  briefly  consider  some  of  the 
arguments  advanced  in  the  able  and  interesting  brief  filed  in  behalf 
of  the  plaintiff  in  error. 

The  propositions  chiefly  relied  on  are,  first,  that  an  inheritance 
tax,  if  assessed  upon  a  legacy  or  interest  composed  of  United  States 
bonds,  is  within  the  very  letter  of  the  United  States  statute  which 
declares  that  such  bonds  shall  be  "exempt  from  taxation  in  any 
form  by  or  under  state,  municipal  or  local  authority;"  and,  sec- 
ond, that  the  tax  in  question  is  unconstitutional,  because  impairing 
and  burdening  the  borrowing  power  of  the  United  States. 

But  if  the  first  proposition  is  sound  and  decisive  of  the  question 
in  this  case,  then  it  must  follow  that  the  cases  in  which  this  court 
has  held  that,  in  assessing  a  tax  upon  corporate  franchises,  the 
amount  of  such  a  tax  may  be  based  upon  the  entire  property,  or 
capital  possessed  by  the  corporation  even  when  composed  in  whole 


PLUMMER  V.  COLER.  81 

or  in  part  of  United  States  bonds,  must  be  overruled.  Plainly  in 
those  cases,  as  in  this,  there  was  taxation  in  a  form,  and  in  them 
as  in  this  the  amount  of  the  tax  was  reached  by  including  in  the 
assessment  United  States  bonds. 

So  that  we  return  to  the  authorities  by  which  it  has  been  estab- 
lished that  a  tax  upon  a  corporate  franchise  or  upon  the  privilege 
of  taking  under  the  statutes  of  wills  and  of  descents,  is  a  tax  not 
upon  United  States  bonds  if  they  happen  to  compose  a  part  of  the 
capital  of  a  corporation  or  of  a  part  of  the  property  of  a  decedent, 
but  upon  rights  and  privileges  created  and  regulated  by  the  State. 

The  second  proposition  relied  on,  namely,  that  to  permit  taxation 
of  the  character  we  are  considering  would  operate,  as  a  burden  upon 
the  borrowing  power  of  the  United  States,  cannot  be  so  readily  dis- 
posed of.  Still,  we  think,  some  observations  can  be  made  which  will 
show  that  the  mischief  which  it  is  claimed  will  follow  if  such 
statute  be  sustained  as  valid,  is  by  no  means  so  great  or  important 
as  supposed. 

And  here,  again,  it  is  obvious  that  to  affirm  the  second  proposi- 
tion will  require  an  overruling  of  our  previous  cases.  For,  on  prin- 
ciple, if  a  tax  on  inheritances,  composed  wholly  or  in  part  of  Fed- 
eral securities,  would,  by  deterring  individuals  from  investing 
therein,  and,  thus  by  lessening  the  demand  for  such  securities,  be 
regarded  as  therefore  unlawful,  it  must  likewise  follow  that,  for 
the  same  reason,  a  tax  upon  corporate  franchises  measured  by  the 
value  of  the  corporation's  property,  composed  in  whole  or  in  part 
of  United  States  bonds,  would  also  be  unlawful. 

It  is  further  contended  that  there  is  a  vital  difference  between 
the  individual  and  the  corporation;  that  the  individual  exists  and 
carries  on  his  operations  under  natural  power  and  of  common 
right,  while  the  corporation  is  an  artificial  being,  created  by  the 
State  dependent  upon  the  State  for  the  continuance  of  its  exist- 
ence, and  subject  to  regulation  and  the  imposition  of  burdens  upon 
it  by  the  State,  not  at  all  applicable  to  natural  persons. 

Without  undertaking  to  go  beyond  what  has  already  been  de- 
cided by  this  court  in  Mager  v.  Grima,  8  How.  490,  in  Srholey  v. 
Rew,  23  Wall.  331;  and  in  United  States  v.  Perkins  163  U.  S.  625. 
and  in  the  other  cases  heretofore  cited,  we  may  regard  it  as  estab- 
lished that  the  relation  of  the  individual  citizen  and  resident  to  the 
State  is  such  that  his  right,  as  the  owner  of  property,  to  direct 
its  descent  by  will,  or  by  permitting  its  descent  to  be  regulated  by 

tho  statute,  and  his  right,  as  legatee,  devisee  or  heir,  to  receive  the 
6 


82  LIMITATIONS  OF  THE  TAXING  POWER. 

property  of  his  testator  or  ancestor,  are  rights  derived  from  and 
regulated  by  the  State,  and  we  are  unable  to  perceive  any  sound 
distinction  that  can  be  drawn  between  the  power  of  the  State  in 
imposing  taxes  upon  franchises  of  corporations,  composed  of  in- 
dividual persons,  and  in  imposing  taxes  upon  the  right  or  privilege 
of  individuals  to  avail  themselves  of  the  right  to  grant  and  to 
receive  property  under  the  statutes  regulating  the  descent  of  the 
property  of  decedents.  And,  at  all  events,  the  mischief  appre- 
hended, of  impairing  the  borrowing  power  of  the  government  by 
State  taxation,  is  the  same  whether  that  taxation  be  imposed  upon 
corporate  franchises  or  upon  the  privilege  created  and  regulated  by 
the  statutes  of  inheritance. 

The  contention  of  the  plaintiff  in  error  that  taxation  of  the 
estates  of  decedents  in  any  form  however  slight,  is  invalid,  if 
United  States  bonds  are  included  in  the  appraisement,  seems  to  be 
unreasonable.  Suppose  a  decedent's  estate  consisted  wholly  of 
United  States  securities,  could  it  reasonably  be  claimed  that  the 
charges  and  expenses  of  administration,  imposed  under  the  laws 
of  the  state,  would  not  be  payable  out  of  the  funds  of  the  estate? 
If  the  estate  were  a  small  one,  such  expenses  might  require  the 
application  of  all  the  federal  securities.  If  the  estate  were  a 
large  one,  the  expenses  attendant  upon  administration  would  be 
proportionately  large,  to  be  raised  out  of  the  Federal  securities.  It 
is  not  sufficient  to  say  that  such  expenses  are  in  the  nature  of 
statutory  debts,  and  that  the  question  of  the  exemption  of  United 
States  bonds  cannot  arise  until  after  the  debts  of  the  estate  shall 
have  been  paid.  For,  after  all,  what  is  an  inheritance  tax  but  a 
debt  exacted  by  the  State  for  protection  afforded  during  the  life 
time  of  the  decedent?  It  is  often  impracticable  to  secure  from 
living  persons  their  fair  share  of  contribution  to  maintain  the 
administration  of  the  State,  and  such  laws  seem  intended  to  en- 
able to  secure  payment  from  the  estate  of  the  citizen  when  his 
final  account  is  settled  with  the  State.  Nor  can  it  be  readily  sup- 
posed that  such  obligations  can  be  evaded  or  defeated  by  the  par- 
ticular form  in  which  the  property  of  the  decedent  was  invested. 

Upon  the  whole,  we  think  that  the  decision  of  the  courts  below 
was  correct,  and  the  judgment  is  therefore  affirmed. 

Mr.  Justice  WHITE  dissented. 

Mr.  Justice  PECKHAM  took  no  part  in  the  decision. 


POLLOCK  V.  FARMERS'  LOAN  &  TRUST  CO.    83 


POLLOCK  V.  FARMERS'  LOAX  &  TRUST  CO. 

Supreme  Court  of  the  United  States.     October,  1894. 
157  United  States  429. 

i 
Mr.  Chief  Justice  FULLER,  after  stating  the  case,  .      . 

delivered  the  opinion  of  the  court : 
The  contention  of  the  complaint  is: 

Third.  That  the  law  is  invalid  so  far  as  imposing  a  tax  upon 
income  received  from  state  and  municipal  bonds. 

The  averment  in  the  bill  is  that  the  defendant  company  owns 
two  millions  of  the  municipal  bonds  of  the  city  of  New  York,  from 
which  it  derives  an  annual  income  of  $60,000,  and  that  the  directors 
of  the  company  intend  to  return  and  pay  taxes  on  the  income  so 
derived. 

The  Constitution  contemplates  the  independent  exercise  by  the 
Xation  and  the  State,  severally,  of  their  constitutional  powers. 

As  the  States  cannot  tax  the  powers,  the  operations,  or  the  prop- 
erty of  the  United  States,  nor  the  means  which  they  employ  to  carry 
their  powers  into  execution,  so  it  has  been  held  that  the  United 
States  have  no  power  under  the  Constitution  to  tax  either  the 
instrumentalities  or  the  property  of  a  State. 

A  municipal  corporation  is  the  representative  of  the  State  and 
one  of  the  instrumentalities  of  the  State  government.  It  was  long 
ago  determined  that  the  property  and  revenues  of  municipal  cor- 
porations are  not  subjects  of  Federal  taxation.  Collector  v.  Day, 
11  Wall.  113,  124;  United  States  v.  Railroad  Company,  17  Wall. 
322,332.  In  Collector  v.  Day,  it  was  adjudged  that  Congress  had 
no  power,  even  by  an  act  taxing  all  incomes,  to  levy  a  tax  upon  the 
salaries  of  judicial  officers  of  a  State,  for  reasons  similar  to  those 
on  which  it  had  been  held  in  Dobbins  v.  Commissioners,  16  Peters 
435,  that  a  State  could  not  tax  the  salaries  of  officers  of  the  United 
States.  Mr.  Justice  Xelson,  in  delivering  judgment,  said:  "The 
general  government,  and  the  States,  although  both  exist  within 
the  same  territorial  limits,  are  separate  and  distinct  sovereignties, 
acting  separately  and  independently  of  each  other,  within  their 
respective  spheres.  The  former  in  its  appropriate  sphere  is 
-upreme;  but  the  States  within  the  limits  of  their  powers  not 
granted,  or,  in  the  language  of  the  tenth  amendment,  'reserved/  are 


84  LIMITATIONS  OF  THE  TAXING  POWER. 

as  independent  of  the  general  government  as  that  government 
within  its  sphere  is  independent  of  the  States." 

This  is  quoted  in  Van  Brocklin  v.  Tennessee,  117  U.  S.  151, 
178,  and  the  opinion  continues:  "Applying  the  same  principles, 
this  court,  in  United  States  v.  Railroad  Company,  17  Wall.  322, 
held  that  a  municipal  corporation  within  a  State  could  not  be  taxed 
by  the  United  States  on  the  dividends  or  interest  of  stock  or  bonds 
held  by  it  in  a  railroad  or  canal  company,  because  the  municipal 
corporation  was  a  representative  of  the  State,  created  by  the  State 
to  exercise  a  limited  portion  of  its  powers  of  government,  and  there- 
fore its  revenues,  like  those  of  the  State  itself,  were  not  taxable  by 
the  United  States.  The  revenues  thus  adjudged  to  be  exempt  from 
Federal  taxation  were  not  themselves  appropriated  to  any  specific 
public  use,  nor  derived  from  property  held  by  the  State,  or  by  the 
municipal  corporation  for  any  specific  public  use,  but  were  part  of 
the  general  income  of  that  corporation,  held  for  the  public  use  in 
no  other  sense  than  all  property  and  income,  belonging  to  it  in  its 
municipal  character,  must  be  so  held.  The  reasons  for  exempting 
all  the  property  and  income  of  a  State,  or  of  a  municipal  corpora- 
tion, which  is  a  political  division  of  a  State,  from  Federal  taxation, 
equally  require  the  exemption  of  all  the  property  and  income  of 
the  National  government  from  State  taxation." 

In  Mercantile  Bank  v.  New  York,  121  U.  S.  138,  162,  this  court 
said:  "Bonds  issued  by  the  State  of  New  York,  or  under  its  au- 
thority by  its  public  municipal  bodies,  are  means  for  carrying  on 
the  work  of  the  government,  and  are  not  taxable  even  by  the 
United  States,  and  it  is  not  a  part  of  the  policy  of  the  government 
which  issues  them  subject  to  taxation  for  its  own  purposes." 

The  question  in  Bonaparte  v.  Tax  Court,  104  U.  S.  592,  was 
whether  the  registered  public  debt  of  one  State,  exempt  from  tax- 
ation by  that  State  or  actually  taxed  there,  was  taxable  by  another 
State  when  owned  by  a  citizen  of  the  latter,  and  it  was  held  that 
there  was  no  provision  of  the  Constitution  of  the  United  States 
which  prohibited  such  taxation.  The  States  had  not  covenanted 
that  this  could  not  be  done,  whereas,  under  the  fundamental  law, 
as  to  the  power  to  borrow  money,  neither  the  United  States  on  the 
one  hand,  nor  the  States  on  the  other,  can  interfere  with  that 
power  as  possessed  by  each  and  an  essential  element  of  the  sov- 
ereignty of  each. 

The  law  under  consideration  provides  "that  nothing  herein  con- 
tained shall  apply  to  States,  counties  or  municipalities."  It  i* 
contended  that  although  the  property  or  revenues  of  the  States  or 


VAN  BROCKLIN  V.  TENNESSEE.  85 

their  instrumentalities  cannot  be  taxed,  nevertheless  the  income  de- 
rived from  State,  county  and  municipal  securities  can  be  taxed. 
But  we  think  the  same  want  of  power  to  tax  the  property  or  rev- 
enues of  the  States  or  their  instrumentalities  exists  in  relation  of 
a  tax  on  the  income  from  their  securities,  and  for  the  same  reason, 
and  that  reason  is  given  by  Chief  Justice  Marshall  in  Weston  \. 
Charleston,  2  Pet.  449,  468,  where  he  said:  "The  right  to  tax  the 
contract  to  any  extent,  when  made,  must  operate  upon  the  power 
to  borrow  before  it  is  exercised,  and  have  a  sensible  influence  on 
the  contract.  The  extent  of  this  influence  depends  on  the  will  of 
a  distinct  government.  To  any  extent,  however  inconsiderable,  it 
is  a  burthen  on  the  operations  of  government.  It  may  be  carried 

to  an  extent  which  shall  arrest  them  entirely The 

tax  on  government  stock  is  thought  by  this  court  to  be  a  tax  on  the 
contract,  a  tax  on  the  power  to  borrow  money  on  the  credit  of 
the  United  States,  and  consequently  to  be  repugnant  to  the  Con- 
stitution." Applying  this  language  to  these  municipal  securities, 
it  is  obvious  that  taxation  on  the  interest  therefrom  would  operate 
on  the  power  to  borrow  before  it  is  exercised,  and  would  have  a 
sensible  influence  on  the  contract,  and  that  the  tax  in  question  is  a 
tax  on  the  power  of  the  States  and  their  instrumentalities  to  borrow 
money,  and  consequently  repugnant  to  the  Constitution. 


5.     Taxation  of  Government  Property. 
VAN  BROCKLIN  V.  STATE   OF  TENNESSEE. 

Supreme  Court  of  the  United  States.     March,  1886. 
Ill  U.  S.  151. 

Mr.  Justice  GRAY,  after  stating  the  case deliv- 
ered the  opinion  of  the  court. 

The  question  presented  by  this  writ  of  error  is  whether  lands  in 
the  State  of  Tennessee,  which,  pursuant  to  acts  of  Congress  for  the 
laying  and  collection  of  direct  taxes,  are  sold,  struck  off  and  pur- 
chased by  the  United  States  for  the  amount  of  the  tax  thereon,  and 
are  afterwards  sold  by  the  United  States  for  a  larger  sum,  or  re- 
deemed by  the  former  owner,  are  liable  to  be  taxed,  under  author- 
ity of  the  State,  while  so  owned  by -the  United  States. 

The  judgment  of  the  Supreme  Court  of  Tennessee  rests  upon  the 
position  that  these  lands,  although  lawfully  purchased  by  the 


86  LIMITATIONS  OF  THE  TAXING  POWER. 

United  States,  at  the  time  of  being  taxed  under  the  laws  of  the 
State,  were  not  exempt  from  State  taxation,  because  they  had  not 
been  expressly  ceded  by  the  State  to  the  United  States. 

We  are  unable  to  reconcile  this  position  with  a  just  view  of  the 
rights  and  powers  conferred  upon  the  national  government  by  the 
Constitution  of  the  United  States. 

...'.'.'  .  The  attempt  to  use  the  taxing  power  of  a  State 
on  the  means  employed  by  the  government  of  the  Union,  in  pur- 
suance of  the  Constitution,  is  itself  an  abuse,  because  it  is  the  usur- 
pation of  a  power  which  the  people  of  a  single  State  cannot  -give. 
The  power  to  tax  involves  the  right  to  destroy;  the  power  to  de- 
stroy may  defeat  and  render  useless  the  power  to  create;  and  there 
is  a  plain  repugnance  in  conferring  on  one  government  a  power 
to  control  the  constitutional  measures  of  another,  which  other,  with 
respect  to  those  very  measures,  is  declared  to  be  supreme  over  that 
which  exerts  the  control.  The  States  have  no  power,  by  taxation  or 
otherwise,  to  retard,  impede,  burden,  or  in  any  manner  control,  the 
operations  of  the  constitutional  laws  enacted  by  Congress  to  carry 
into  execution  the  powers  vested  in  the  general  government. 

The  United  States  do  not  and  cannot  hold  property,  ae  a  mon- 
arch may,  for  private  or  personal  purposes.  All  the  property  and 
revenues  of  the  United  States  must  be  held  and  applied,  as  all 
taxes,  duties,  imposts  and  excises  must  be  laid  and  collected,  "to 
pay  the  debts  and  provide  for  the  common  defence  and  general  wel- 
fare of  the  United  States."  Constitution,  art.  1,  sect.  8,  cl.  1; 
Dobbins  v.  Erie  County  Commissioners,  16  Pet.  435,  448.  The 
principal  reason  assigned  in  Buchanan  v.  Alexander,  4  How.  20, 
for  holding  that  money  in  the  hands  of  a  purser,  due  to  seamen 
in  the  navy  for  wages,  could  not  be  attached  by  their  creditors  in 
a  State  court  was,  "The  funds  of  the  government  are  specifically 
appropriated  to  certain  national  objects;  and  if  such  appropria- 
tions may  be  diverted  and  defeated  by  State  process  or  otherwise, 
the  functions  of  the  government  may  be  suspended." 

The  more  thoroughly  the  proceedings  by  which  the  States  be- 
came members  of  the  Union,  either  by  joining  in  establishing  the 
Federal  Constitution,  or  by  admission  under  subsequent  acts  of 
Congress,  are  examined,  the  more  strongly  they  confirm  the  same 
view. 

It  cannot   be   doubted  that  the  provisions   which   speak   of  the 


VAN  BROCKLIN  V.  TENNESSEE.  87 

exemption  of  property  of  the  United  States  from  taxation,  in  the 
various  acts  of  Congress  admitting  States  into  the  Union,  are 
equivalent  to  each  other;  and  that,  like  the  other  provision,  which 
often  accompanies  them,  that  the  State  "shall  not  interfere  with 
the  primary  disposal  of  the  soil  by  the  United  States,''  they  are 
but  declaratory,  and  confer  no  new  right  or  power  upon  the  United 
States. 

The  necessary  exemption  of  all  property  of  the 

United  States  from  State  taxation  has  been  recognized  by  the  high- 
est courts  of  Illinois,  California  and  Kansas  .  .  .  .  ;  and  by 
those  of  Virginia,  Connecticut,  Iowa  and  Wisconsin.  Western 
Union  Telegraph  Co.  v.  Richmond,  26  Grattan  1,  30;  Andrew  v. 
Auditor,  28  Grattan  115,  124;  West  Hartford  v.  Water  Commis- 
sioners, 44  Conn.  360,  368;  Chicago,  Rock  Island  &  Pacific  R.  R. 
v.  Davenport,  51  Iowa  451,  454;  Wisconsin  Central  R.  R.  v.  Tay- 
lor County,  52  Wis.  37,  51,  52. 

The  legislatures  of  most  of  the  States  have  affirmed  the  same 
principle,  by  inserting  in  their  general  tax  acts  an  exemption  of 
property  belonging  to  the  United  States. 

In  short,  under  a  republican  form  of  government,  the  whole 
property  of  the  State  is  owned  and  held  by  the  State  for  public 
uses,  and  is  not  taxable,  unless  the  State  which  owns  and  holds  it 
for  those  uses  clearly  enacts  that  it  shall  share  the  burden  of  tax- 
ation with  other  property  within  its  jurisdiction.  Whether  the 
property  of  one  of  the  States  of  the  Union  is  taxable  under  the 
laws  of  that  State  depends  upon  the  intention  of  that  State  as 
manifested  by  those  laws.  But  whether  the  property  of  the  United 
States  shall  be  taxed  under  the  laws  of  a  State  depends  upon  the 
will  of  its  owner,  the  United  States,  and  no  State  can  tax  the 
property  of  the  United  States  without  their  consent. 

The  liability  of  the  property  of  the  Pacific  Railroad  Companies  to 
state  taxation  has  been  upheld,  on  the  distinction  stated  in  M'Cul- 
lough  v.  Maryland,  4  Wheat.  436,  and  in  Osoorn  v.  Bank  of  the 
United  States,  9  Wheat.  867,  already  cited,  and  reasserted  in  Na- 
tional  Bank  v.  Commonwealth,  9  Wall.  353,  362,  namely,  that 
although  the  railroad  corporations  were  agents  of  the  United  States, 
the  property  taxed  was  not  the  property  of  the  United  States,  but 
the  property  of  the  agents,  and  a  State  might  tax  the  prop- 
erty of  the  agents  provided  it  did  not  tax  the  means  employed  by 


88  LIMITATIONS  OF  THE  TAXING  POWER. 

the  national  government.  Thomson  v.  Pacific  Railroad,  9  Wall. 
579;  Railroad  Co.  v.  Peniston,  18  Wall.  5.  In  Railroad  Co.  v. 
Peniston,  Mr.  Justice  Strong,  who  delivered  the  principal  opinion, 
dwelt  upon  the  consideration,  that  the  property  taxed  was  not 
owned  by  the  United  States,  as  essential  to  support  the  validity  of 
the  tax.  18  Wall.  32,  34.  And  Mr.  Justice  Bradley,  in  a  dis- 
senting opinion  in  which  Mr.  Justice  Field  joined,  said :  "Thi.1 
states  cannot  tax  the  powers,  the  operations,  or  the  property  of  the 
United  States,  nor  the  means  which  it  employs  to  carry  its  powers 
into  execution.''  18  Wall.  41. 

The  cases  in  which  this  court  has  held  that  the  United  States 
have  no  power  under  the  Constitution  to  tax  either  the  instrumen- 
talities or  the  property  of  a  State  have  a  direct  and  important  bear- 
ing upon  the  question  before  us. 

The  United  States  acquired  the  title  to  all  the  land  now  in  ques- 
tion under  the  express  authority  of  acts  of  Congress,  and  by  pro- 
ceedings the  validity  of  which  is  clearly  established  by  a  series  of 
decisions  of  this  court.  Acts  of  June  7,  1862,  ch.  98,  §  7,  12  Stat. 
423;  June  8,  1872,  ch.  337,  §  4,  17  Stat.  331;  and  February  8, 
1875,  ch.  36,  §  26,  18  Stat.  313;  Bennett  v.  Hunter,  9  Wall.  326; 
De  Treville  v.  Smalls,  98,  U.  S.  517;  Keely  v.  Sanders,  99  U.  S. 
441;  United  States  v.  Taylor,  104  Ul  S.  216;  United  States  v. 
Lawton,  110  U.  S.  146.  The  imposition  of  direct  taxes  upon  the 
land  by  those  acts  of  Congress  was  a  lawful  exercise  of  the  power 
conferred  by  the  Constitution  to  lay  and  collect  taxes.  The  pro- 
visions authorizing  the  United  States  to  sell  the  land  for  non- 
payment of  the  taxes  assessed  thereon,  and  to  purchase  the  land  for 
the  amount  of  the  taxes  if  no  one  would  bid  a  higher  price,  were 
necessary  and  proper  means  for  carrying  into  effect  the  power  to  lay 
and  collect  the  taxes;  and  so  were  the  provisions  authorizing  the 
United  States  afterwards  to  sell  the  land,  to  apply  the  proceeds  to 
the  payment  of  taxes,  and  to  hold  any  surplus  for  the  benefit  of 
the  former  owner.  While  the  United  States  owned  the  land  struck 
off  to  them  for  the  amount  of  the  taxes  because  no  one  would  pay 
more  for  it,  and  until  it  was  sold  by  the  United  States  for  a 
greater  price,  or  was  redeemed  by  the  former  owner,  the  United 
States  held  the  entire  title  as  security  for  the  payment  of  the 
taxes;  and  it  could  not  be  known  how  much,  if  anything,  beyond 
the  amount  of  the  taxes,  the  land  was  worth.  To  allow  land,  law- 
fully held  by  the  United  States  as  security  for  the  payment  of  taxes 
assessed  by  and  due  to  them,  to  be  assessed  and  sold  for  State 


UNITED  STATES  V.  B.  AND  0.  R.  R.  CO.  89 

taxes,  would  tend  to  create  a  conflict  between  the  officers  of  the 
two  governments,  to  deprive  the  United  States  of  a  title  lawful!}' 
acquired  under  express  acts  of  Congress,  and  to  defeat  the  exer- 
cise of  the  constitutional  power  to  lay  and  collect  taxes,  to  pay  the 
debts  and  provide  for  the  common  defence  and  general  welfare  of 
the  United  States. 

The  question  whether  the  taxes  laid  under  authority  of  the 
State  can  be  collected  in  this  suit  depends  upon  the  question 
whether  they  were  lawfully  assessed.  But  all  the  assessments  were 
unlawful,  because  made  while  the  land  was  owned  by  the  United 
States.  The  assessments,  being  unlawful,  created  no  lien  upon  the 
land.  Those  taxes,  therefore.'  cannot  be  collected,  even  since  the 
plaintiffs  in  error  have  redeemed  or  purchased  the  land  from  the 
United  States. 

Whether  the  Supreme  court  of  Tennessee  rightly  construed  the 
provisions  of  the  Constitution  and  statutes  of  the  State  as  not  ex- 
empting from  taxation  lands  belonging  to  the  United  States,  ex- 
clusive jurisdiction  over  which  had  not  been  ceded  by  the  State,  is 
quite  immaterial,  because,  for  the  reasons  and  upon  the  authorities 
above  stated,  this  court  is  of  opinion  that  neither  the  people  nor 
the  legislature  of  Tennessee  had  power,  by  constitution  or  statute, 
to  tax  the  land  in  question,  so  long  as  the  title  remained  in  the 
United  States. 

States  may  impose  a  tax  on  a  bequest  to  the  United  States.  United  States 
v.  Perkins,  163  U.  S.  625. 


UNITED   STATES  V.   BALTIMORE   AND  OHIO  RAILROAD 

COMPANY. 

Supreme  Court  of  the  United  States.     December,  1872. 
17  Wallace,  822. 

The  legislature  of  Maryland  gave  to  the  city  of  Baltimore  (then 
desirous  of  aiding  the  Baltimore  and  Ohio  Railroad  Company  in 
the  construction  of  its  road,  which  the  city  councils  of  Baltimore 
conceived  would,  if  made,  greatly  benefit  the  city),  authority  to 
issue  and  sell  its  bonds  to  the  extent  of  $5,000,000,  payable  in 
1890;  and  to  lend  the  proceeds  to  the  railroad  company,  less  10 
per  cent,  to  be  reserved  as  a  sinking  fund  to  pay  the  principal  of 
the  loan  at  its  maturity.  This  the  city-  did,  the  railroad  company 
in  turn  giving  to  it  a  mortgage  on  all  its  road,  revenue  and  fran- 


90  LIMITATIONS  OF  THE  TAXING  POWER. 

chises,  to  secure  the  payment  of  the  bonds  which  the  city  had 
issued,  and  the  interest  which  it  had  bound  itself  to  pay. 

After  the  passage  of  the  internal  revenue  laws, 

the  government  claimed  payment  from  the  company  of  a  tax  of  5 
per  cent,  which  the  collectors  of  the  Federal  revenue  alleged  that 

under  the  plain  language  of  the 122nd  section,  the 

company  was  bound  to  withhold  from  the  city  and  pay  to  the 
United  States.  The  company  refused  so  to  pay  the  5  per  cent  to 
the  government  on  the  ground  that  the  tax  was  not  a  tax  laid  on  it, 
the  company,  but  one  laid  on  their  creditor,  the  city  of  Baltimore, 
and  that  that  city,  being  a  municipal  corporation,  could  not  have 
its  revenues  taxed  by  the  Federal  government. 

The  United  States  accordingly  sued  the  company,  in  the  court 
below,  in  assumpsit. 

Mr.  Justice  HUNT  delivered  the  opinion  of  the  court. 

The  defendants  insist,  firstly,  that  the  section  in  question  does 
not  lay  a  tax  upon  the  corporations  therein  named,  and  by  whom 
the  tax  is  payable,  upon  their  own  account,  but  uses  them  as  .1 
convenient  means  of  collecting  the  tax  from  the  creditor,  or  stock- 
holder, upon  whom  the  tax  is  really  laid.  They  insist  as  a  conse- 
quence, secondly,  that  the  present  is  a  tax  upon  the  revenues  of  the 
city  of  Baltimore;  and,  thirdly,  that  it  is  not  within  the  power  of 
Congress  to  tax  the  income  or  property  of  a  municipal  corporation. 

In  the  case  before  us,  this  question  controls  its  decision.  If  the 
tax  were  upon  the  railroad,  there  is  no  defence.  It  must  be  paid. 
But  we  hold  that  the  tax  imposed  by  the  122d  section  is  in  sub- 
stance and  in  law  a  tax  upon  the  income  of  the  creditor  or  stock- 
holder, and  not  a  tax  upon  the  corporation. 

The  creditor  here  is  the  city  of  Baltimore,  and  the  question  then 
arises  whether  this  tax  can  be  collected  from  the  revenues  of  that 
municipal  corporation. 

There  is  no  dispute  about  the  general  rules  of  law  applicable  to 
this  subject.  The  power  of  taxation  by  the  Federal  government 
upon  the  subjects  and  in  the  manner  prescribed  by  the  act  we  are 
considering,  is  undoubted.  There  are,  however,  certain  depart- 
ments which  are  excepted  from  the  general  power.  The  right  of 
the  States  to  administer  their  own  affairs  through  their  legislative, 
executive  and  judicial  departments,  in  their  own  manner,  through 
their  own  agencies,  is  conceded  by  the  uniform  decisions  of  this 
court  and  by  the  practice  of  the  Federal  government  from  its  or- 


UNITED  STATES  V.  B.  AND  0.  E.  R.  CO.  91 

ganization.  This  carries  with  it  an  exemption  of  those  agencies  and 
instruments  from  the  taxing  power  of  the  Federal  government.  If 
they  may  be  taxed  lightly,  they  may  be  taxed  heavily;  if  justly, 
oppressively.  Their  operation  may  be  impeded  and  may  be  de- 
stroyed, if  any  interference  is  permitted.  Hence,  the  beginning  of 
such  taxation  is  not  allowed  on  the  one  side,  is  not  claimed  on  the 
other. 

A  municipal  corporation  like  the  city  of  Baltimore,  is  a  repre- 
sentative not  only  of  the  state,  but  is  a  portion  of  its  governmental 
power.  It  is  one  of  its  creatures,  made  for  a  specific  purpose,  to 
exercise  within  a  limited  sphere  the  powers  of  the  state. 

Let  us  look  at  the  facts  of  the  case  before  us.  The  city  of  Balti- 
more, with  a  view  to  its  commercial  prosperity,  was  desirous  of  aid- 
ing in  the  construction  of  a  railroad,  by  which  the  commerce  and 
business  of  the  Western  States  would  be  brought  to  that  city.  For 
this  purpose  it  was  authorized  by  the  legislature  to  issue  its  corpor- 
ate bonds  for  $5,000,000,  on  which  it  was  to  obtain  the  money. 
The  proceeds  of  these  bonds,  reserving  10  per  cent  as  a  sinking 
fund,  were  to  be  paid  to  the  railroad  company.  To  secure  the  city 
against  loss  and  to  provide  for  the  payment  of  interest  on  the  bonds 
of  the  city  as  it  should,  from  time  to  time,  mature,  and  of  the  prin- 
cipal when  payable,  the  railroad  company  were  to  execute  a  mort- 
gage to  the  city  upon  its  road  and  franchise  and  revenues.  All  this 
was  done  as  agreed  upon.  The  interest  secured  by  this  mortgage, 
has,  from  time  to  time,  been  paid  by  the  railroad  company  to  the 
city,  and  it  is  a  tax  (under  the  122d  section  before  referred  to) 
upon  the  interest  thus  paid,  that  the  plaintiff  now  seeks  to  recover. 

That  the  State  possessed  the  power  to  confer  this  authority  upon 
the  city  we  see  no  reason  to  doubt. 

Was  it  exercised  for  the  benefit  of  the  municipality,  that  is,  in 
the  course  of  its  municipal  business  or  duties?  In  other  words, 
was  it  acting  in  its  capacity  of  an  agent  of  the  State,  delegated  to 
exercise  certain  powers  for  the  benefit  of  the  municipality  called 
the  city  of  Baltimore?  Did  it  act  as  an  auxiliary  servant  and  trus- 
tee of  the  supreme  legislative  power?  The  legislature  and  the  au- 
thorities of  the  city  of  Baltimore  decided  that  the  investment  of 
$5,000,000  in  the  aid  of  the  construction  of  a  railroad,  which  should 
bring  to  that  city  the  unbounded  harvests  of  the  West,  would  be  a 
measure  for  the  benefit  of  the  inhabitants  of  Baltimore  and  of  the 
municipality.  This  vast  business  was  a  prize  for  which  the  States 


92  LIMITATIONS  OF  THE  TAXING  POWER. 

north  of  Maryland  were  contending.  Should  it  endeavor  by  the 
expenditure  of  this  money  or  this  credit  to  bring  this  vast  business 
into  its  own  State,  and  make  its  commercial  metropolis  great  and 
prosperous,  or  should  it  refuse  to  incur  hazard,  allow  other  States 
to  absorb  this  commerce,  and  Baltimore  to  fall  into  an  inferior  posi- 
tion? This  was  a  question  for  the  decision  of  the  city  under  the 
authority  of  the  State.  It  was  a  question  to  be  decided  solely  with 
reference  to  public  and  municipal  interests.  The  city  had  authority 
to  spend  its  money  in  opening  squares,  in  widening  streets,  in  deep- 
ening rivers,  in  building  common  roads  or  railways.  The  State 
could  do  these  things  by  the  direct  act  of  its  legislature,  or  it  could" 
empower  the  city  to  do  them.  It  could  act  directly  or  through  the 
agency  of  others.  It  is  not  a  question  to  be  here  discussed,  whether 
the  action  proposed  would  in  the  end  result  to  the  benefit  of  the 
city.  It  might  be  wise  or  it  might  prove  otherwise.  The  city  was 
to  reap  the  fruits  in  the  advanced  prosperity  of  all  its  material  in- 
terests, if  successful.  If  unsuccessful,  the  city  was  to  bear  the  load 
of  debt  and  taxation,  which  would  surely  follow.  The  city  had  the 
power  given  it  by  the  legislature  to  decide  the  question.  It  was 
within  the  scope  of  its  municipal  powers. 

We  admit  the  proposition  of  the  counsel,  that  the  revenue  must 
be  municipal  in  its  nature  to  entitle  it  to  the  exemption  claimed. 
Thus,  if  an  individual  were  to  make  the  city  of  Baltimore  his  agent 
and  trustee  to  receive  funds,  and  to  distribute  them  in  aid  of 
science,  literature,  or  the  fine  arts,  or  even  for  the  relief  of  the  des- 
titute and  infirm,  it  is  quite  possible  that  such  revenues  would  be 
subject  to  taxation.  The  corporation  would  therein  depart  from  its 
municipal  character,  and  assume  the  position  of  a  private  trustee. 
It  would  occupy  a  place  which  an  individual  could  occupy  with 
equal  propriety.  It  would  not  in  that  action  be  an  auxiliary  or 
servant  of  the  State,  hut  of  the  individual  creating  the  trust.  There 
is  nothing  of  a  governmental  character  in  such  a  position.  It  is  not 
necessary,  however,  to  speculate  upon  hypothetical  cases.  We  are 
clear  in  the  opinion  that  the  present  transaction  is  within  the  range 
of  the  municipal  duties  of  the  city,  and  that  the  tax  cannot  be  col- 
lected. 

Mr.  Justice  CLIFFORD  and  Mr.  Justice  MILLER  dissenting. 


BOBBINS  V.  SHELBY  COUNTY.  93 

II.     TAXES  ON  COMMERCE. 

1.     State   Taxation  of  Interstate  and  Foreign  Commerce. 
BOBBINS  V.  SHELBY  COUNTY  TAXING  DISTRICT. 

Supreme  Court  of  the  United  States.     March,  1887. 
120  United  States,  489. 

This  was  an  information  in  a  state  court  of  Tennessee,  against 
the  plaintiff  in  error,  for  doing  business  in  the  Taxing  District  of 
Shelby  County  in  that  State,  as  a  drummer  on  behalf  of  a  firm 
doing  business  in  Cincinnati,  Ohio,  without  a  license  as  required  by 
the  provision  of  the  statute  of  Tennessee,  which  is  set  out  in  the 
opinion  of  the  court.  The  defendant  was  found  guilty,  and  this 
judgment  was  affirmed  by  the  Supreme  Court  of  the  state  on  ap- 
peal. 13  Lea  303.  The  defendant  sued  out  this  writ  of  error.  The 
cause  was  submitted  at  the  last  term  of  court.  The  court,  on  the 
8th  of  March,  1886,  ordered  it  argued;  and  the  argument  was  heard 
accordingly  at  this  term.  The  case  is  stated  in  the  opinion  of  the 
court. 
«  Mr.  Justice  BRADLEY  delivered  the  opinion  of  the  court. 

This  case  originated  in  the  following  manner:  Sabine  Robbing, 
the  plaintiff  in  error,  in  February,  1884,  was  engaged  at  the  city  of 
Memphis,  in  the  State  of  Tennessee,  in  soliciting  the  sales  of  goods 
for  the  firm  of  Rose,  Robbing  &  Co.,  of  Cincinnati,  in  the  State  of 
Ohio,  dealers  in  paper,  and  other  articles  of  stationery,  .and  exhib- 
ited samples  for  the  purpose  of  effecting  such  sales, — an  employ- 
ment usually  denominated  as  that  of  a  "drummer."  There  was  in 
force  at  that  time  a  statute  of  Tennessee,  relating  to  the  subject  oi* 
taxation  in  the  Taxing  Districts  of  the  State,  applicable,  however, 
only  to  the  Taxing  Districts  of  Shelby  County,  (formerly  the  city 
of  Memphis,)  by  which  it  was  enacted,  amongst  other  things,  that 
"'All  drummers,  and  all  persons  not  having  a  regular  licensed  house 
of  business  in  the  Taxing  District,  offering  for  sale  or  selling  goods, 
wares,  or  merchandise  therein,  by  sample,  shall  be  required  to  pay 
to  the  county  trustee  the  sum  of  $10  per  week,  or  $25  per  month, 
for  such  privilege,  and  no  license  shall  be  issued  for  a  longer  period 
than  three  months."  Stats.  Tennessee,  1881,  c.  96,  §  16. 

The  business  of  selling  by  sample  and  nearly  sixty  other  occupa- 
tions had  been  by  law  declared  to  be  privileges,  and  were  taxed  as 
such,  and  it  was  made  a  misdemeanor,  punishable  by  a  fine  of  not 
less  than  five,  nor  more  than  fifty  dollars,  to  exercise  any  of  such 


94  LIMITATIONS  OF  THE  TAXING  POWER. 

occupations  without  having  first  paid  the  tax  or  obtained  the  license 
required  therefor. 

Under  this  law,  Eobbins,  who  had  not  paid  the  tax  nor  taken  a 
license,  was  prosecuted,  convicted  and  sentenced  to  pay  a  fine  of  ten 
dollars,  together  with  the  state  and  county  tax,  and  costs;  and  on 
appeal  to  the  Supreme  Court  of  the  State,  the  judgment  was 
affirmed.  This  writ  of  error,  is  brought  to  review  the  judgment  of 
the  Supreme  Court,  on  the  ground  that  the  law  imposing  the  tax 
was  repugnant  to  that  clause  of  the  Constitution  of  the  United 
States  which  declares  that  Congress  shall  have  power  to  regulate 
commerce  among  the  several  states. 

The  principal  question  argued  before  the  Supreme  Court  of  Ten- 
nessee was,  as  to  the  constitutionality  of  the  act  which  imposed  the 
tax  on  drummers;  and  the  court  decided  that  it  was  constitutional 
and  valid. 

That  is  the  question  before  us,  and  it  is  one  of  great  importance 
to  the  people  of  the  United  States,  both  as  it  represents  their  busi- 
ness interests  and  their  constitutional  rights.  It  is  presented  in  a 
nutshell,  and  does  not,  at  this  day,  require  for  its  solution  any 
great  elaboration  of  argument  or  review  of  authorities.  Certain 
principles  have  been  already  established  by  the  decisions  of  this 
court  which  will  conduct  us  to  a  satisfactory  decision.  Among  those 
principles  are  the  following: 

1.  The  Constitution  of  the  United  States  having  given  to  Con- 
gress the  power  to  regulate  commerce,  not  only  with  foreign  nations, 
but  among  the  several   States,   that  power  is  necessarily  exclusive 
whenever  the  subjects  of  it  are  national  in  their  character,  or  admit 
of  one  uniform  system,  or  plan  of  regulation.     This  was  decided  in 
the  case  of  Cooky  v.  Board  of  Wardens  of  the  Port  of  Philadelphia, 
12  How.  299,  319,  and  was  virtually  involved  in  the  case  of  Gib- 
bons v.  Ogden,  9  Wheat.  1,  and  has  been  confirmed  in  many  subse- 
quent cases,  amongst  others,  in  Brown  v.  Maryland,  12  Wheat.  419; 
The  Passenger  Cases,  7  How.  283;  Crandall  v.  Nevada,  6  Wall.  35, 
42;  Ward  v.  Maryland,  12  Wall.  418,  430;  State  Freight  Tax  Cases, 
15  Wall.  232,  279;  Henderson  v.  Mayor  of  New   York,  92  U.  S. 
259,  272;    Railroad  Co.  v.  Huscn,  95  U.   S.  465,  469;    Mobile  v. 
Kimball,  102  U.  S.  691,  697;  Gloucester  Ferry  Co.  v.  Pennsylvania, 
114  U.  S.  196,  203;  Wabash,  &c.,  Railway  Co.  v.  Illinois,  118  U.  S. 
557. 

2.  Another  established  doctrine  of  this  court  is,  that  where  thn 
power  of  Congress  to  regulate  i?  exclusive  the  failure  of  Congress  to 


BOBBINS  V.  SHELBY  COUNTY.  95 

make  express  regulations  indicates  its  will  that  the  subject  shall  be 
left  free  from  any  restrictions  or  impositions;  and  any  regulation 
of  the  subject  by  the  States,  except  in  matters  of  local  concern  only, 
as  hereafter  mentioned,  is  repugnant  to  such  freedom.  This  was 
held  by  Mr.  Justice  Johnson  in  Gibbons  v.  Ogden,  9  Wheat.  1,  222, 
by  Mr.  Justice  Grier  in  the  Passenger  Cases,  7  How.  283,  462,  and 
has  been  affirmed  in  subsequent  cases.  State  Freight  Tax  Cases,  15 
Wall.  232,  279;  Railroad  Co.  \.  Husen,  95  U.  S.  465,  469;  Welton 
v.  Missouri,  91  U.  S.  275,  282 ;  Mobile  v.  Kimball,  102  U.  S.  691, 
697;  Brown  v.  Houston,  114  U.  S.  622,  631;  Walling  v.  Michigan, 
116  U.  S.  446,  455;  Pickard  v.  Pullman  Southern  Car  Co.,  117  U. 
S.  34;  Wabash,  &c.,  Railway  Co.  v.  Illinois,  118  U.  S.  557. 

3.  It  is  also  an  established  principle,  as  already  indicated,  that 
the  only  way  in  which  commerce  between  the  States  can  be  legiti- 
mately affected  by  State  laws,  is  when,  by  virtue  of  its  police  power, 
and  its  jurisdiction  over  persons  and  property  within  its  limits,  a 
State  provides  for  the  security  of  the  lives,  limbs,  health,  and  com- 
fort of  persons  and  the  protection  of  property;  or  when  it  does 
those  things  which  may  otherwise  incidentally  affect  commerce,  such 
as  the  establishment  and  regulation  of  highways,  canals,  railroads, 
wharves,  ferries,  and  other  commercial  facilities;  the  passage  of  in- 
spection laws  to  secure  the  due  quality  and  measure  of  products 
and  commodities;  the  passage  of  laws  to  regulate  or  restrict  the 
sale  of  articles  deemed  injurious  to  the  health  or  morals  of  the  com- 
munity; the  imposition  of  taxes  upon  persons  residing  within  the 
State  or  belonging  to  its  population,  and  upon  avocations  and  em- 
ployments pursued  therein,  not  directly  connected  with  foreign  or 
interstate  commerce  or  with  some  other  employment  or  business  ex- 
ercised under  authority  of  the  Constitution  and  laws  of  the  United 
States;  and  the  imposition  of  taxes  upon  all  property  within  the 
State,  mingled  with  and  forming  part  of  the  great  mass  of  property 
therein.  But  in  making  such  internal  regulations  a  State  cannot 
impose  taxes  upon  persons  passing  through  the  State,  or  coming 
into  it  merely  for  a  temporary  purpose,  especially  if  connected  with 
interstate  or  foreign  commerce;  nor  can  it  impose  such  taxes  upon 
property  imported  into  the  State  from  abroad,  or  from  another 
State,  and  not  yet  become  part  of  the  common  mass  of  property 
therein;  and  no  discrimination  can  be  made,  by  any  such  regula- 
tions, adversely  to  the  persons  or  property  of  other  States;  and  ho 
regulations  can  be  made  directly  affecting  interstate  commerce.  Any 
taxation  or  regulation  of  the  latter  character  would  be  an  unauthor- 
ized interference  with  the  power  given  to  Congress  over  the  subject. 


96  LIMITATIONS  OF  THE  TAXING  POWER. 

For  authorities  on  this  last  head  it  is  only  necessary  to  refer  to 
those  already  cited. 

In  a  word  it  may  be  said,  that  in  the  matter  of  interstate  com- 
merce the  United  States  are  but  one  country,  and  are  and  -must  be 
subject  to  one  system  of  regulations,  and  not  to  a  multitude  of  sys- 
tems. The  doctrine  of  the  freedom  of  that  commerce,  except  as 
regulated  by  Congress,  is  so  firmly  established  that  it  is  unnecessary 
to  enlarge  upon  the  subject. 

In  view  of  these  fundamental  principles,  which  are  to  govern  our 
decision,  we  may  approach  the  question  submitted  to  us  in  the  pres- 
ent case,  and  inquire  whether  it  is  competent  for  a  State  to  levy  a 
tax  or  impose  any  other  restriction  upon  the  citizens  or  inhabitants 
of  other  States,  for  selling  or  seeking  to  sell  their  goods  in  such 
State  before  they  are  introduced  therein.  Do  not  such  restrictions 
affect  the  very  foundation  of  interstate  trade?  How  is  a  manufac- 
turer, or  a  merchant,  of  one  State,  to  sell  his  goods  in  another  State, 
without,  in  some  way,  obtaining  orders  therefor?  Must  he  be  com- 
pelled to  send  them  at  a  venture,  without  knowing  whether  there  is 
any  demand  for  them? 

The  truth  is,  that,  in  numberless  instances,  the  most  feasible,  if 
not  the  only  practicable,  way  for  the  merchant  or  manufacturer  to 
obtain  orders  in  other  States  is  to  obtain  them  by  personal  applica- 
tion, either  by  himself,  or  by  some  one  employed  by  him  for  that 
purpose;  and  in  many  branches  of  business  he  must  necessarily  ex- 
hibit samples  for  the  purpose  of  determining  the  kind  and  quality 
of  the  goods  he  proposes  to  sell,  or  which  the  other  party  desires  to 
purchase.  But  the  right  of  taxation,  if  it  exists  at  all,  is  not  con- 
fined to  selling  by  sample.  It  embraces  every  act  of  sale,  whether 
by  word  of  mouth  only,  or  by  exhibition  of  samples.  If  the  right 
exists,  any  New  York  or  Chicago  merchant  visiting  New  Orleans  or 
Jacksonville,  for  pleasure  or  for  his  health,  and  casually  taking  an 
order  for  goods  to  be  sent  from  his  warehouse,  could  be  made  lia- 
ble to  pay  a  tax  for  so  doing,  or  be  convicted  of  a  misdemeanor  for 
not  having  taken  out  a  license.  The  right  to  tax  would  apply 
equally  as  well  to  the  principal  as  to  his  agent,  and  to  a  single  act 
of  sale  as  to  a  hundred  acts. 

But  it  will  be  said  that  a  denial  of  this  power  of  taxation  will 
interfere  with  the  right  of  the  State  to  tax  business  pursuits  and 
callings  carried  on  within  its  limits,  and  its  rights  to  require 
licenses  for  carrying  on  those  which  are  declared  to  be  privileges. 
This  may  be  true  to  a  certain  extent;  but  only  in  those  cases  in 


ROBBIES  V.  SHELBY  COUNTY.  97 

which  the  states  themselves,  as  well  as  individual  citizens,  are  sub- 
ject to  the  restraints  of  the  higher  law  of  the  Constitution.  And 
this  interference  will  be  very  limited  in  its  operation.  It  will  only 
prevent  the  levy  of  a  tax,  or  the  requirement  of  a  license,  for  mak- 
ing negotiations  in  the  conduct  of  interstate  commerce;  and  it  may 
well  be  asked  where  the  State  gets  authority  for  imposing  burdens 
on  that  branch  of  business  any  more  than  for  imposing  a  tax  on 
the  business  of  importing  from  foreign  countries,  or  even  on  that' 
of  postmaster  or  United  States  marshal.  The  mere  calling  the 
business  of  a  drummer  a  privilege  cannot  make  it  so.  Can  the 
State  legislature  make  it  a  Tennessee  privilege  to  carry  on  the  busi- 
ness of  importing  goods  from  foreign  countries?  If  not,  has  it  any 
better  right  to  make  it  a  State  privilege  to  carry  on  interstate  com- 
merce? It  seems  to  be  forgotten,  in  argument,  that  the  people  of 
this  country  are  citizens  of  the  United  States,  as  well  as  of  the  in- 
dividual States,  and  that  they  have  some  rights  under  the  Constitu- 
tion and  laws  of  the  former  independent  of  the  latter,  and  free 
from  any  interference  or  restraint  from  them. 

To  deny  to  the  State  the  power  to  lay  the  tax,  or  require  the 
license  in  question,  will  not,  in  any  perceptible  degree,  diminish  its 
resources  or  its  just  power  of  taxation.  It  is  very  true,  that  if  the 
goods  when  sold  were  in  the  State,  and  part  of  its  general  mass  of 
property,  they  would  be  liable  to  taxation;  but  when  brought  into 
the  State  in  consequence  of  the  sale  they  will  be  equally  liable ;  so 
that,  in  the  end,  the  State  will  derive  just  as  much  revenue  from 
them  as  if  they  were  there  before  the  sale.  As  soon  as  the  goods 
are  in  the  State  and  become  part  of  its  general  mass  of  property, 
they  will  become  liable  to  be  taxed  in  the  same  manner  as  other 
property  of  similar  character,  as  was  distinctly  held  by  this  court 
in  the  case  of  Brown  v.  Houston,  114  U.  S.  622.  When  goods  are 
sent  from  one  State  to  another  for  sale,  or,  in  consequence  of  a 
sale,  they  become  part  of  its  general  property,  and  amenable  to  its 
laws;  provided  that  no  discrimination  be  made  against  them  as 
goods  from  another  State,  and  that  they  be  not  taxed  by  reason  of 
being  brought  from  another  State,  but  only  taxed  in  the  usual  way 
as  other  goods  are.  Brown  v.  Houston,  qua  supra',  Machine  Co.  v. 
Gage,  100  U.  S.  676.  But  to  tax  the  sale  of  such  goods,  or  the 
offer  to  sell  them,  before  they  are  brought  into  the  State,  is  a  very 
different  thing  and  seems  to  us  clearly  a  tax  on  interstate  commerce 
itself. 

It  is  strongly  urged,  as  if  it  were  a  material  point  in  the  case, 

that  no  discrimination  is  made  between  domestic  and  foreign  drum- 

7 


98  LIMITATIONS  OF  THE  TAXING  POWER. 

mers — those  of  Tennessee  and  those  of  other  States;  that  all  are 
taxed  alike.  But  that  does  not  meet  the  difficulty.  Interstate  com- 
merce cannot  be  taxed  at  all,  even  though  the  same  amount  of  tax 
should  be  laid  on  domestic  commerce,  or  that  which  is  carried  on 
solely  within  the  State.  This  was  decided  in  the  case  of  TJie  State 
Freight  Tax,  15  Wall.  232.  The  negotiation  of  goods  which  are  in 
another  State,  for  the  purpose  of  introducing  them  into  the  State 
in  which  the  negotiation  is  made,  is  interstate  commerce.  A  New 
Orleans  merchant  cannot  be  taxed  there  for  ordering  goods  from 
London  or  New  York,  because,  in  the  one  case,  it  is  an  act  of  for- 
eign, and,  in  the  other,  of  interstate  commerce,  both  of  which  are 
subject  to  regulation  by  Congress  alone. 

To  say  that  the  tax,  if  invalid  as  against  drummers  from  other 
States,  operates  as  a  discrimination  against  the  drummers  of  Ten- 
nessee, against  whom  it  is  conceded  to  be  valid,  is  no  argument; 
because,  the  State  is  not  bound  to  tax  its  own  drummers;  and  if  it 
does  so  whilst  having  no  power  to  tax  those  of  other  States,  it  acts 
of  its  own  free  will,  and  is  itself  the  author  of  such  discrimination. 
As  before  said,  the  State  may  tax  its  own  internal  commerce;  but 
that  does  not  give  it  any  right  to  tax  interstate  commerce. 

The  judgment  of  the  Supreme  Court  of  Tennessee  is  reversed, 
and  the  plaintiff  in  error  must  be  discharged. 

Mr.  Chief  Justice  WAITE  with  whom  concurred  Mr.  Justice 
FIELD  and  Mr.  Justice  GRAY,  dissenting. 


CASE  OF  THE  STATE  FREIGHT  TAX. 

Supreme  Court  of  the  United  States.    December,  1872. 
15  Wallace  232. 

Mr.  Justice  STRONG  delivered  the  opinion  of  the  court. 

We  are  called  upon,  in  this  case,  to  review  a  judgment  of  the 
Supreme  Court  of  Pennsylvania,  affirming  the  validity  of  a  statute 
of  the  State,  which  the  plaintiffs  in  error  allege  to  be  repugnant  to 
the  Federal  Constitution. 

The  case  presents  the  question  whether  the  statute  in  question, — 
so  far  as  it  imposes  a  tax  upon  freight  taken  up  within  the  State 
and  carried  out  of  it,  or  taken  up  outside  the  State  and  delivered 
within  it,  or,  in  different  words,  upon  all  freight  other  than  that 


CASE  OF  STATE  FREIGHT  TAX.  99 

taken  up  and  delivered  within  the  State, — is  not  repugnant  to  the 
provision  of  the  Constitution  of  the  United  States  which  ordains 
that  "Congress  shall  have  power  to  regulate  commerce  with  foreign 
nations  and  among  the  several  States,"  or  in  conflict  with  the  pro- 
vision that  "no  State  shall,  without  the  consent  of  Congress,  lay 
any  imposts  or  duties  on  imports  or  exports,  except  what  may  be 
absolutely  necessary  for  executing  its  inspection  laws." 

Before  proceeding,  however,  to  a  consideration  of  the  direct  ques- 
tion whether  the  statute  is  in  direct  conflict  with  any  provision  of 
the  Constitution  of  the  United  States,  it  is  necessary  to  have  a 
clear  apprehension  of  the  subject  and  the  nature  of  the  tax  im- 
posed by  it.  It  has  repeatedly  been  held  that  the  constitutionality, 
or  unconstitutionality  of  a  State  tax  is  to  be  determined,  not  by 
the  form  or  agency  through  which  it  is  to  be  collected,  but  by  the 
subject  upon  which  the  burden  is  laid. 

Upon  what,  then  is  the  tax  imposed  by  the  act  of  August  25th, 
1864,  to  be  considered  as  laid?  Where  does  the  substantial  burden 
rest?  Very  plainly  it  was  not  intended  to  be,  nor  is  it  in  fact, 
a  tax  upon  the  franchise  of  the  carrying  companies,  or  upon  their 
property,  or  upon  their  business  measured  by  the  number  of  tons 
of  freight  carried.  On  the  contrary  it  is  expressly  laid  upon  the 
freight  carried.  The  companies  are  required  to  pay  to  the  State 
treasurer  for  the  use  of  the  Commonwealth  "on  each  two  thousand 
pounds  of  freight  so  carried,"  a  tax  at  the  specified  rates.  And  this 
tax  is  not  proportioned  to  the  business  done  in  transportation.  It 
is  the  same  whether  the  freight  be  moved  one  mile  or  three  hun- 
dred. If  freight  be  put  upon  a  road  and  carried  at  all,  tax  is  to 
be  paid  upon  it,  the  amount  of  the  tax  being  determined  by  the 
character  of  the  freight.  And  when  it  is  observed  that  the  act  pro- 
vides "where  the  same  freight  shall  be  carried  over  and  upon  dif- 
ferent but  continuous  lines,  said  freight  shall  be  chargeable  with 
tax  as  if  it  had  been  carried  upon  one  line,  and  the  whole  tax  shall 
be  paid  by  such  one  of  said  companies  as  the  State  treasurer  may 
select  and  notify  thereof,"  no  room  is  left  for  doubt.  This  provis- 
ion demonstrates  that  the  tax  has  no  reference  to  the  business  of 
the  companies.  In  the  case  of  connected  lines  thousands  of  tons 
may  be  carried  over  the  line  of  one  company  without  any  liability  of 
that  company  to  pay  the  tax.  The  State  treasurer  is  to  de- 
cide which  of  several  shall  pay  the  whole. 

Considering  it,  then,  as  manifest  that  the  tax  demanded  by  the 


100  LIMITATIONS  OF  THE  TAXING  POWER. 

act  is  imposed,  not  upon  the  company,  but  upon  the  freight  carried, 
and  because  carried,  we  proceed  to  inquire  whether,  so  far  as  it 
affects  commodities  transported  through  the  State,  or  from  points 
without  the  State  to  points  within  it,  or  from  points  within  the 
State  to  points  without  it,  the  act  is  a  regulation  of  interstate  com- 
merce. Beyond  all  question  the  transportation  of  freight,  or  of  the 
subjects  of  commerce,  for  the  purpose  of  exchange  or  sale,  is  a  con- 
stituent of  commerce  itself.  This  has  never  been  doubted,  and  prob- 
ably the  transportation  of  articles  of  trade  from  one  State  to  an- 
other was  the  prominent  idea  in  the  minds  of  the  framers  of  the 
Constitution,  when  to  Congress  was  committed  the  power  to  regu- 
late commerce  among  the  several  States.  A  power  to  prevent  em- 
barrassing restrictions  by  any  State  was  the  thing  desired.  The 
power  was  given  by  the  same  words  and  in  the  same  clause 
by  which  was  conferred  power  to  regulate  commerce  with  foreign 
nations.  It  would  be  absurd  to  suppose  that  the  transmission  of  tbe 
subjects  of  trade  from  the  State  to  the  buyer,  or  from  the  place  of 
production  to  the  market,  was  not  contemplated,  for  without  that 
there  could  be  no  consummated  trade  either  with  foreign  nations  or 
among  the  States.  In  his  work  on  the  Constitution  (§  1057), 
Judge  Story  asserts  that  the  sense  in  which  the  word  commerce  is 
used  in  that  instrument  includes  not  only  traffic,  but  intercourse 
and  navigation.  And  in  the  Passenger  Cases  (7  Howard,  416)  it 
was  said :  "Commerce  consists  in  selling  the  superfluity,  in  pur- 
chasing articles  of  necessity,  as  well  productions  as  manufactures,  in 
buying  from  one  nation  and  selling  to  another,  or  in  transporting 
the  merchandise  from  the  seller  to  the  buyer  to  gain  the  freight." 
Nor  doe>  it  make  any  difference  whether  this  interchange  of  com- 
modities is  by  land  or  by  water.  In  either  case  the  bringing  of  the 
goods  from  the  seller  to  the  buyer  is  commerce.  Among  the  States 
it  must  have  been  principally  by  land  when  the  Constitution 
was  adopted. 

Then,  why  is  not  a  tax  upon  freight  transported  from  State  to 
State  a  regulation  of  interstate  transportation,  and,  therefore,  a  reg- 
ulation of  commerce  among  the  States?  Is  it  not  prescribing  a  rule 
for  the  transporter,  by  which  he  is  to  be  controlled  in  bringing  the 
subjects  of  commerce  into  the  State  and  in  taking  them  out?  The 
present  case  is  the  best  possible  illustration.  The  Legislature  of 
Pennsylvania  has  in  effect  declared  that  every  ton  of  freight  taken 
up  within  the  State  and  carried  out,  or  taken  up  in  other  States 
and  brought  within  her  limits,  shall  pay  a  specified  tax.  The  pay- 
ment of  that  tax  is  a  condition,  upon  which  is  made  dependent  the 


CASE  OF  STATE  FREIGHT  TAX.  101 

prosecution  of  this  branch  of  commerce,  and  as  there  is  no  limit 
to  the  rate  of  taxation  she  may  impose,  if  she  can  tax  at  all,  it  is 
obvious  the  condition  may  be  made  so  onerous  that  an  interchange 
of  commodities  with  other  States  would  be  rendered  impossible. 
The  same  power  that  may  impose  a  tax  of  two  cents  per  ton  upon 
coal  carried  out  of  the  State,  may  impose  one  of  five  dollars.  Such 
an  imposition,  whether  large  or  small,  is  a  restraint  of  the  privilege 
or  right  to  have  the  subjects  of  commerce  pass  freely  from  one  State 
to  another  without  being  obstructed  by  the  intervention  of  State 
lines.  It  would  hardly  be  maintained,  we  think,  that  had  the  State 
established  custom-houses  on  her  borders,  wherever  a  railroad  or 
canal  comes  to  the  State  line,  and  demanded  at  these  houses  a  duty 
for  allowing  merchandise  to  enter  or  leave  the  State  upon  one  of 
those  railroads  or  canals,  such  an  imposition  would  not  have  been 
a  regulation  of  commerce  with  her  sister  States.  Yet  it  is  difficult 
to  see  any  substantial  difference  between  the  supposed  case  and  the 
one  we  have  in  hand.  The  goods  of  no  citizen  of  New  York,  New 
Jersey,  Ohio,  or  of  any  other  State,  may  be  placed  upon  a  canal, 
railroad  or  steamboat  within  the  State  for  transportation  any  dis- 
tance, either  into  or  out  of  the  State,  without  being  subjected  to  the 
burden.  Xor  can  it  make  any  difference  that  the  legislative  pur- 
pose was  to  raise  money  for  the  support  of  the  State  government, 
and  not  to  regulate  transportation.  It  is  not  the  purpose  of  the  law, 
but  its  effect,  which  we  are  now  considering.  Nor  is  it  at  all  mate- 
rial that  the  tax  is  levied  upon  all  freight,  as  well  that  which  is 
wholly  internal  as  that  embarked  in  interstate  trade.  We  are  not 
at  this  moment  inquiring  further  than  whether  taxing  goods  car- 
ried because  they  are  carried  is  a  regulation  of  carriage.  The  State 
may  tax  its  internal  commerce,  but  if  an  act  to  tax  interstate  or  for- 
eign commerce  is  unconstitutional,  it  is  not  cured  by  including  in  its 
provisions  subjects  within  the  domain  of  the  State.  Nor  is  a  rule 
prescribed  for  carriage  of  goods  through,  out  of,  or  into  a  State  any 
the  less  a  regulation  of  transportation,  because  the  same  rule  may 
be  applied  to  carriage  which  is  wholly  internal.  Doubtless  a  State 
may  regulate  its  internal  commerce  as  it  pleases.  If  a  State  chooses 
to  exact  conditions  for  allowing  the  passage  or  carriage  of  persons 
or  freight  through  it  into  another  State,  the  nature  of  the  exaction 
is  not  changed  by  adding  to  it  similar  conditions  for  allowing  trans- 
portation wholly  within  the  State. 

If,  then,  this  is  a  tax  upon  freight  carried  between  States,  and  a 
tax  because  of  its  transportation,  and  if  such  a  tax  is  in  effect  a  reg- 


102  LIMITATION'S  OF  THE  TAXING  POWER. 

illation  of  interstate  commerce,  the  conclusion  seems  to  be  inevitable 
that  it  is  in  conflict  with  the  Constitution  of  the  United  States.  It 
is  not  necessary  to  the  present  case  to  go  into  the  much  debated 
question  whether  the  power  given  to  Congress  by  the  Constitution 
to  regulate  commerce  among  the  States  is  exclusive. 

However  this  may  be,  the  rule  has  been  asserted  with  great  clear- 
ness, that  whenever  the  subjects  over  which  the  power  to  regulate 
commerce  is  asserted  are  in  their  nature  nationa1  or  admit  of  one 
uniform  system,  or  plan  of  regulation,  they  may  justly  be  said  to  be 
of  such  a  nature  as  to  require  exclusive  legislation  by  Congress. 
(Cooley  v.  Port  Wardens,  12  Howard  299;  Oilman  v.  Philadelphia, 
supra',  Crandall  v.  The  State  of  Nevada,  6  Wallace  42.) 

Surely  transportation  of  passengers  or  merchandise  through  a 
State,  or  from  one  State  to  another,  is  of  this  nature.  It  is  ol 
national  importance  that  over  that  subject  there  should  be  but  one 
regulating  power,  for  if  one  State  can  directly  tax  persons  or  prop- 
erty passing  through  it,  or  tax  them  indirectly  by  levying  a  tax  upon 
their  transportation,  every  other  may,  and  thus  commercial  inter- 
course between  States  remote  from  each  other  may  be  destroyed. 
The  produce  of  Western  States  may  thus  be  effectually  excluded 
from  Eastern  markets,  for  though  it  misrht  bear  the  imposition  of  a 
single  tax  it  would  be  crushed  under  the  load  of  many.  It  was  to 
guard  against  the  possibility  of  such  commercial  embarrassment,  no 
doubt,  that  the  power  of  regulating  commerce  among  the  States  was 
conferred"  upon  the  federal  government. 

In  Almy  v.  The  State  of  California  (24  How.  169),  it  was  held 
by  this  court  that  a  law  of  the  State,  imposing  a  tax  upon  bills  ot 
lading  for  gold  or  silver  transported  from  that  State  to  any  port  or 
place  without  the  State,  was  substantially  a  tax  upon  the  transpor- 
tation itself,  and  was  therefore  unconstitutional.  True,  the  decision 
#as  rested  on  the  ground  that  it  was  a  tax  upon  exports,  and  sub- 
sequently, in  Woodruff  v.  Parham  (8  Wall.  123),  the  court  deniecf 
the  correctness  of  the  reasons  given  for  the  decision;  but  they  said 
at  the  same  time  the  case  was  well  decided  for  another  reason,  viz., 
that  such  a  tax  was  a  regulation  of  commerce — a  tax  imposed  upon 
the  transportation  of  goods  from  one  State  to  another,  over  the  high 
seas,  in  conflict  with  that  freedom  of  transit  of  goods  and  persons 
between  one  State  and  another,  which  is  wichin  the  rule  laid  down 
in  Crandall  v.  Nevada  (6  Wall.  35),  and  with  the  authority  of  Con- 
gress to  regulate  commerce  among  the  States. 

In  Crandall  v.  The  State  of  Nevada,  where  it  appeared  that  the 


CASE  OF  STATE  FEEIGHT  TAX.  103 

legislature  of  the  State  had  enacted  that  there  should  "be  levied  and 
collected  a  capitation  tax  of  one  dollar  upon  every  person  leaving 
the  State  by  any  railroad,  stage-coach  or  other  vehicle  engaged  or 
employed  in  the  business  of  transporting  passengers  for  hire/'  and 
required  the  proprietors,  owners,  and  corporations  so  engaged  to 
make  monthly  reports  of  the  number  of  persons  carried,  and  to  pay 
the  tax,  it  was  ruled  that  though  required  to  be  paid  by  the  carriers, 
the  tax  was  a  tax  upon  passengers,  for  the  privilege  of  being  carried 
out  of  the  State,  and  not  a  tax  on  the  business  of  carriers.  For 
that  reason  it  was  held  that  the  law  imposing  it  was  invalid,  as  in 
conflict  with  the  Constitution  of  the  United  States.  A  .majority  of 
the  court,  it  is  true,  declined  to  rest  the  decision  upon  the  ground 
that  the  tax  was  a  regulation  of  interstate  commerce,  and  therefore 
beyond  the  power  of  the  State  to  impose,  but  all  the  judges  agreed 
that  the  State  law  was  unconstitutional  and  void.  The  Chief  Just- 
ice and  Mr.  Justice  Clifford  thought  the  judgment  should  have  been 
placed  exclusively  on  the  ground  that  the  act  of  the  State  legislature 
was  inconsistent  with  the  power  conferred  upon  Congress  to  regu- 
late commerce  among  the  several  States,  and  it  does  not  appear  that 
the  other  judges  held  that  it  was  not  thus  inconsistent.  In  any 
view  of  the  case,  however,  it  decides  that  a  State  cannot  tax  persons 
for  passing  through  or  out  of  it.  Interstate  transportation  of  pas- 
sengers is  beyond  the  reach  of  the  State  legislature.  And  if  State 
taxation  of  persons  passing  from  one  State  to  another,  or  a  State 
tax  upon  interstate  transportation  of  passengers  is  unconstitutional 
a  fortiori,  if  possible,  is  a  State  tax  upon  the  carriage  of  merchand- 
ise from  State  to  State,  in  conflict  with  the  Federal  Constitution. 
Merchandise  is  the  subject  of  commerce.  Transportation  is  essen- 
tial to  commerce;  and  every  burden  laid  upon  it  is  pro  tanto  a  re- 
striction. Whatever,  therefore,  may  be  the  true  doctrine  respecting 
the  exclusiveness  of  the  power  vested  in  Congress  to  regulate  com- 
merce among  the  States,  we  regard  it  as  established  that  no  State 
can  impose  a  tax  upon  freight  transportation  from  State  to  State, 
or  upon  the  transporter  because  of  such  transportation. 

But  while  holding  this,  we  recognize  fully  the  power  of  each  State 
to  tax  at  its  discretion  its  own  internal  commerce,  and  the  fran- 
chises, property  or  business  of  its  own  corporations,  so  that  inter- 
state intercourse,  trade  or  commerce  be  not  embarrassed  or  restrict- 
ed. That  must  remain  free. 

The  conclusion  of  the  whole  is  that,  in  our  opinion,  the  act  of  the 
legislature  of  Pennsylvania  of  August  25th,  1864,  so  far  as  it  ap- 
plies to  articles  carried  through  the  State,  or  articles  taken  up  in 


104  LIMITATIONS  OF  THE  TAXING  POWER. 

the  State  and  carried  out  of  it,  or  articles  taken  up  without 
the  State  and  brought  into  it,  is  unconstitutional  and  void. 

JUDGMENT  REVERSED,  and  the  record  is  remitted  for  further  pro- 
ceedings. 

Mr.  Justice  SWAYNE  (with  whom  concurred  Mr.  Justice  DAVIS), 
dissenting. 

I  dissent  from  the  opinion  just  read.  In  my  judgment  the  tax  is 
imposed  upon  the  business  of  those  required  to  pay  it.  The  ton- 
nage is  only  the  mode  of  ascertaining  the  extent  of  the  business. 
That  no  discrimination  is  made  between  freight  carried  wholly 
within  the  State,  and  that  brought  into  or  carried  through  or  out 
of  it,  sets  this,  as  I  think,  in  a  clear  light,  and  is  conclusive  on  the 
subject. 


LELOUP  V.  PORT  OF  MOBILE. 

Supreme  Court  of  the  United  States.     October,  1887. 
127  United  States,  640. 

Mr.  Justice  BRADLEY  delivered  the  opinion  of  the  court. 

This  was  an  action  brought  in  the  Mobile  Circuit  Court,  in  the 
State  of  Alabama,  by  the  Port  of  Mobile,  a  municipal  corporation, 
against  Edward  Leloup,  agent  of  the  Western  Union  Telegraph 
Company,  to  recover  a  penalty  imposed  upon  him  for  the  violation 
of  an  ordinance  of  said  corporation,  adopted  in  pursuance  of  the 
powers  given  to  it  by  the  legislature  of  Alabama,  and  in  force  in 
August,  1883. 

In  approaching  the  question  thus  presented,  it  is  proper  to  note 
that  the  license  tax  in  question  is  purely  a  tax  on  the  privilege  of 
doing  the  business  in  which  the  telegraph  company  was  engaged. 
By  the  laws  of  Alabama  in  force  at  the  time  this  tax  was  imposed, 
the  telegraph  company  was  required,  in  addition,  to  pay  taxes  to  the 
State,  county  and  port  of  Mobile,  on  its  poles,  wires,  fixtures  and 
other  property,  at  the  same  rate  and  to  the  same  extent  as  other  cor- 
porations and  individuals  were  required  to  do.  Besides  the  tax  on 
tangible  property,  they  were  also  required  to  pay  a  tax  of 
three-quarters  of  one  per  cent  on  their  gross  receipts  within  the 
State. 

The  question   is   squarely  presented   to  us,  therefore,   whether  a 


LELOUP  V.  PORT  OF  MOBILE.  105 

State,  as  a  condition  of  doing  business  within  its  jurisdiction,  may 
exact  a  license  tax  from  a  telegraph  company,  a  large  part  of  whose 
business  is  the  transmission  of  messages  from  one  State  to  another 
and  between  the  United  States  and  foreign  countries,  and  which  is 
invested  with  the  powers  and  privileges  conferred  by  the  act  of  Con- 
gress passed  July  24th,  1866,  and  other  acts  incorporated  in  Title 
LXV.  of  the  Revised  Statutes?  Can  a  State  prohibit  such  a  com- 
pany from  doing  such  a  business  within  its  jurisdiction  unless  it 
will  pay  a  tax  and  procure  a  license  for  the  privilege?  If  it  can,  it 
can  exclude  such  companies,  and  prohibit  the  transaction  of  such 
business  altogether.  We  are  not  prepared  to  say  that  this  can  be 
done. 

Ordinary  occupations  are  taxed  in  various  ways,  and,  in  mos£ 
cases,  legitimately  taxed.  But  we  fail  to  see  how  a  State  can  tax  a 
business  occupation  when  it  cannot  tax  the  business  itself.  Of 
course,  the  exaction  of  a  license  tax  as  a  condition  of  doing  any  par- 
ticular business,  is  a  tax  on  the  occupation;  and  a  tax  on  the  occu- 
pation of  doing  a  business  is  surely  a  tax  on  the  business. 

Now,  we  have  decided  that  communication  by  telegraph  is  com- 
merce, as  well  as  in  the  nature  of  postal  service,  and  if  carried  on 
between  different  States,  it  is  commerce  among  the  several  States, 
and  directly  within  the  power  of  regulation  conferred  upon  Con- 
gress, and  free  from  the  control  of  State  regulations,  except  such  as 
are  strictly  of  a  police  character.  In  the  case  of  The  Pensacola  Tel- 
egraph Co.  v.  The  Western  Union  Telegraph  Co.,  96  U.  S.  1,  we 
held  that  it  was  not  only  the  right,  but  the  duty  of  Congress  to  take 
care  that  intercourse  among  the  States  and  the  transmission  of  in- 
telligence between  them  be  not  obstructed  or  unnecessarily  encum- 
bered by  State  legislation;  and  that  the  act  of  Congress,  passed  July 
24th,  1866,  above  referred  to,  so  far  as  it  declares  that  the  erection 
of  telegraph  lines  shall,  as  against  State  interference,  be  free  to  all 
who  accept  its  terms  and  conditions,  and  that  a  telegraph  company 
of  one  State  shall  not,  after  accepting  them,  be  excluded  by  another 
State  from  prosecuting  its  business  within  her  jurisdiction,  is  a 
legitimate  regulation  of  commercial  intercourse  among  the  States, 
and  is  also  appropriate  legislation  to  execute  the  powers  of  Congress 
over  the  postal  service.  In  Western  Union  Telegraph  Company  v. 
Texas,  105  U.  S.  460,  we  decided  that  a  State  cannot  lay  a  tax  on 
the  interstate  business  of  a  telegraph  company,  as  it  is  interstate 
commerce,  and  that  if  the  company  accepts  the  provisions  of  the  act 
of  1866,  it  becomes  an  agent  of  the  United  States,  so  far  as  the 
business  of  the  government  is  concerned;  and  State  laws  are  uncoa- 


106  LIMITATIONS  OF  THE  TAXING  POWER. 

stitutional  which  impose  a  tax  on  messages  sent  in  the  service  of  the 
government,  or  sent  by  any  persons  from  one  State  to  another.  In 
the  present  case,  it  is  true,  the  tax  is  not  laid  upon  individual  mes- 
sages, but  it  is  laid  on  the  occupation,  or  the  business  of  sending 
such  messages. 

It  comes  plainly  within  the  principles  of  the  decisions  recently 
made  by  this  court  in  Bobbins  v.  The  Taxing  District  of  Slielli/ 
County,  120  U.  S.  489  and  Philadelphia  and  Southern  Steamship 
Co.  v.  Pennsylvania,  122  U.  S.  326. 

It  is  parallel  with  the  case  of  Brown  v.  Maryland,  12  Wheat.  419. 
That  was  a  tax  on  an  occupation  and  this  court  held  that  it  wns 
equivalent  to  a  tax  on  the  business  carried  on, — (the  importation  of 
goods  from  foreign  countries), — and  even  equivalent  to  a  tax  on  the 
imports  themselves,  and  therefore  contrary  to  the  clause  of  the  Con- 
stitution which  prohibits  the  States  from  laying  any  duty  on  im- 
ports. The  Maryland  act  which  was  under  consideration  in  that  case 
declared  that  "all  importers  of  foreign  articles  or  commodities,  etc., 
and  all  other  persons  selling  the  same  by  wholesale,  etc.,  shall  before 
they  are  authorized  to  sell,  take  out  a  license,  ....  for  which 
they  shall  pay  fifty  dollars,"  etc.,  subject  to  a  penalty  for  neglect 
and  refusal.  Chief  Justice  Taney,  referring  to  the  case  of  Brown 
v.  Maryland  in  Almy  v.  State  of  California,  24  How.  169,  173,  in 
which  it  was  decided  that  a  State  stamp  tax  on  bills  of  lading  wa* 
void,  said:  "We  think  this  case  cannot  be  distinguished  from  that 
of  Brown  v.  Maryland.  That  case  was  decided  in  1827,  and  the  de- 
cision has  always  been  regarded  and  followed  as  the  true  construc- 
tion of  the  clause  of  the  Constitution  now  in  question 

The  opinion  of  the  court,  delivered  by  Chief  Justice  Marshall, 
shows  that  it  [the  case]  was  carefully  and  fully  considered  by  the 
court.  And  the  court  decided  that  the  State  law  [the  Maryland  law 
under  consideration  in  Brown  v.  Maryland,]  was  a  tax  on  imports, 
and  the  mode  of  imposing  it  by  giving  it  the  form  of  a  tax  on  the 
occupation  of  the  importer,  merely  varied  the  form  in  which  the 
tax  was  imposed,  without  varying  the  substance." 

But  it  is  urged  that  a  portion  of  the  telegraph  company's  busi- 
ness is  internal  to  the  State  of  Alabama,  and  therefore  taxable  by 
the  State.  But  that  fact  does  not  remove  the  difficulty.  The  tax 
affects  the  whole  business  without  discrimination.  There  are  suffi- 
cient modes  in  which  the  internal  business,  if  not  already  taxed  in 
some  other  way,  may  be  subjected  to  taxation,  without  the  imposi- 
tion of  a  tax  which  covers  the  entire  operations  of  the  company. 

The   state  court  relies  upon  the  case  of    Osborn  v.   Mobile,  16 


LELOUP  V.  PORT  OF  MOBILE.  101 

Wall.  479,  which  brought  up  for  consideration  an  ordinance  of  the 
city,  requiring  every  express  company,  or  railroad  company  doing 
businos  in  that  city,  and  having  a  business  extending  beyond  the 
limits  of  the  State,  to  pay  an  annual  license  of  $500;  if  the  busi- 
ness was  confined  within  the  limits  of  the  State,  the  license  fee  was 
only  $100;  if  confined  within  the  city  it  was  $50;  subject  in  each 
L-ase  to  a  penalty  for  neglect  or  refusal  to  pay  the  charge.  This 
court  held  that  the  ordinance  was  not  unconstitutional.  This  was 
in  December  term,  1872.  In  view  of  the  course  of  decisions  which 
have  been  made  since  that  time,  it  is  very  certain  that  such  an  ordi- 
nance would  now  be  regarded  as  repugnant  to  the  power  conferred 
upon  Congress  to  regulate  commerce  among  the  several  States. 

A  great  number  and  variety  of  cases  involving  the  commercial 
power  of  Congress  have  been  brought  to  the  attention  of  this  court 
during  the  past  fifteen  years  which  have  frequently  made  it  neces- 
sary to  re-examine  the  whole  subject  with  care;  and  the  result  has 
sometimes  been  that  in  order  to  give  full  and  fair  effect  to  the  dif- 
ferent clauses  of  the  Constitution,  the  court  has  felt  constrained  to 
recur  to  the  fundamental  principles  stated  and  illustrated  with  so 
much  clearness  and  force  by  Chief  Justice  Marshall  and  other  mem- 
bers of  the  court  in  former  times,  and  to  modify  in  some  degree 
certain  dicta  and  decisions  that  have  occasionally  been  made  in  the 
intervening  period.  This  is  always  done,  however,  with  great  cau- 
tion, and  an  anxious  desire  to  place  the  final  conclusion  reached 
upon  the  fairest  and  most  just  construction  of  the  Constitution  in 
all  its  parts. 

In  our  opinion  such  a  construction  of  the  Constitution  leads  to 
the  conclusion  that  no  State  has  the  right  to  lay  a  tax  on  interstate 
commerce  in  any  form,  whether  by  way  of  duties  laid  on  the  trans- 
portation of  the  subjects  of  that  commerce,  or  on  the  receipts  de- 
rived from  that  transportation,  or  on  the  occupation  or  business  of 
carrying  it  on,  and  the  reason  is  that  such  taxation  is  a  burden  on 
that  commerce,  and  amounts  to  a  regulation  of  it,  which  belongs 
solely  to  Congress.  This  is  the  result  of  so  many  recent  cases  that 
citation  is  hardly  necessary. 

We  may  here  repeat,  what  we  have  so  often  said  before,  that  this 
exemption  of  interstate  and  foreign  commerce  from  state  regula- 
tion does  not  prevent  the  State  from  taxing  the  property  of  those 
engaged  in  such  commerce  located  within  the  State  as  the  property 
of  other  citizens  is  taxed,  nor  from  regulating  matters  of  local  con- 
cern which  may  incidentally  affect  commerce,  such  as  wharfage, 


108  LIMITATIONS  OF  THE  TAXING  POWER, 

pilotage,  and  the  like.  We  have  recently  had  before  us  the  question 
of  taxing  the  property  of  a  telegraph  company,  in  the  case  of  West- 
ern Union  Telegraph  Company  v.  Massachusetts,  125  U.  S.  530. 

The  result  of  the  conclusion  which  we  have  reached  is,  that  the 
judgment  of  the  Supreme  Couit  of  Alahama  must  be  Reversed,  and 
the  cause  remanded  with  instructions  to  reverse  the  judgment  of 
the  Mobile  Circuit  Court;  and  it  is  so  ordered. 


PICKARD  V.  PULLMAN  SOUTHERN  CAR  CO. 

Supreme  Court  of  the  United  States.     October,  1885. 
117  United  States,  34- 

Mr.  Justice  BLATCHFORD  delivered  the  opinion  of  the  court. 
After  stating  the  Case he  continued: 

The  point  upon  which  the  final  judgment  was  rendered  in  the 
case  was  the  one  considered  and  adjudged  in  the  decision  given  on 
the  demurrer  to  the  declaration.  The  tax  was  not  a  property  tax, 
because,  under  the  Constitution  of  Tennessee,  all  property  must  be 
taxed  according  to  its  value,  and  this  tax  was  not  measured  by 
value,  but  was  an  arbitrary  charge.  What  was  done  by  the  plaintiff 
was  taxed  as  a  privilege,  it  being  assumed  by  the  State  authorities 
that  the  Legislature  had  the  power,  under  the  Constitution  of  Ten- 
nessee, to  enact  the  6th  section  of  the  act  of  1877,  and  that  the 
plaintiff  had  done  what  that  section  declared  to  be  a  privilege.  By 
the  decisions  of  the  Supreme  Court  of  Tennessee,  cited  in  the  opin« 
ion  of  the  Circuit  Court  on  the  demurrer,  it  is  held,  that  the  Legis- 
lature may  declare  the  right  to  carry  on  any  business  or  eccupation 
to  be  a  privilege,  to  be  purchased  from  the  State  on  such  conditions 
as  the  statute  law  may  prescribe,  and  that  it  is  illegal  to  carry  on 
such  business  without  complying  with  those  conditions.  In  this 
case  the  payment  of  the  tax  imposed  was  a  condition  prescribed, 
without  complying  with  which  what  was  done  by  the  plaintiff  was 
made  illegal.  The  tax  was  imposed  as  a  condition  precedent  to  the 
right  of  the  plaintiff  to  run  and  use  the  thirty-six  sleeping  cars 
owned  by  it,  as  it  ran  and  used  them  on  railroads  in  Tennessee. 
The  privilege  tax  is  held  by  the  Supreme  Court  of  Tennessee  to  be 
a  license  tax,  for  the  privilege  of  doing  the  thing  for  which  the  tax 
is  imposed,  it  being  unlawful  to  do  the  thing  without  paying  the 
tax.  .What  was  done  by  the  plaintiff  in  this  case,  in  connection  with 


PICKAED  V.   PULLMAN   SOUTHERN   CAR  CO.      109 

the  use  of  the  thirty-six  cars,  if  wholly  a  branch  of  inter-State  com- 
merce, was  made  by  the  State  of  Tennessee  unlawful  unless  the. tax 
should  be  paid,  and  to  the  extent  of  the  tax,  a  burden  was  placed 
on  such  commerce;  and,  upon  principle,  the  tax,  if  lawful,  might 
equally  well  have  been  large  enough  to  practically  stop  altogether 
the  particular  species  of  commerce. 

What  was  that  commerce?  The  plaintiff,  by  its  contracts,  fur- 
nished sleeping  cars  to  the  railroad  company,  to  be  used  by  the  lat- 
ter "for  the  transportation  of  passengers,"  sufficient  in  numbers  to 

meet  the  requirements  of  travel  on  the  road The 

plaintiff  collected  from  every  person  occupying  the  car  compensa- 
tion for  its  accommodations  in  seats  and  couches.  The  railroad  com- 
pany  permitted  the  plaintiff  to  place  its  tickets  for  seats  and 
couches  on  sale  in  the  ticket  offices  of  the  railroad  company,  the  sale 
to  be  a  part  of  the  general  duties  of  the  ticket  agents  of  the  latter, 
and  to  be  without  charge  to  the  plaintiff,  but  the  proceeds  of  sales 
to  be  at  its  risk 

On  these  facts,  the  cars  in  question  were  cars  for  the  transporta- 
tion of  the  passengers  who  occupied  them,  in  their  transit  into,  or 
through,  or  out  of  Tennessee.  They  were  used  by  the  railroad  com- 
pany for  such  transportation,  and  it  received  the  transit  fare  or 
compensation 

The  tax  was  a  unit,  for  the  privilege  of  the  transit  of  the  pas- 
senger and  all  its  accessories.  No  distinction  was  made  in  the 
tax  between  the  right  of  transit,  as  a  branch  of  commerce  between 
the  States,  and  the  sleeping  and  other  conveniences  which  ap- 
pertained to  a  transit  in  the  car.  The  tax  was  really  one  on  tho 
right  of  transit,  though  laid  wholly  on  the  owner  of  the  car.  So, 
too,  the  service  rendered  to  the  passenger  was  a  unit.  The  car  was 
equally  a  vehicle  of  transit,  as  if  it  had  been  a  car  owned  by  the  rail- 
road company,  and  the  special  convenience  or  comforts  furnished  to 
the  passenger  had  been  furnished  by  the  railroad  company  itself 
As  such  vehicle  of  transit,  the  car,  so  far  as  it  was  engaged  in  inter - 
State  commerce,  was  not  taxable  by  the  state  of  Tennessee;  be- 
cause the  plaintiff  had  no  domicil  in  Tennessee,  and  was  not  sub- 
ject to  its  jurisdiction  for  purposes  of  taxation;  and  the  cars  had 
no  situs  within  the  state  for  purposes  of  taxation;  and  the  plaintiff 
carried  on  no  business  within  the  State,  in  the  sense  in  which  the 
carrying  on  of  business  in  a  State  is  taxable  by  way  of  license  or 
privilege 

The  fare  paid  by  the  inter-State  passenger  to  the  railroad  com- 
pany, and  that  paid  to  the  plaintiff,  added  together,  were  merely  a 


2  n 

^J^ 
•110        LIMITATIONS  OF  THE  TAXING  POWER. 

•charge  for  his  convenience  in  a  particular  way,  and  there  was 
really  but  one  charge  for  the  transit,  though  the  total  amount  paid 
was  divided  among  two  recipients.  The  service  was  a  single  one, 
of  inter-State  transit,  with  certain  accommodations  for  comfort,  and 
what  was  paid  to  the  plaintiff  was  part  of  a  charge  for  the  convey- 
ance of  the  passenger. 

The  views  above  expressed  are  in  harmony  with  numerous  decis- 
ions which  have  been  made  by  this  court  on  the  subject  to  which 
they  relate. 

.  The  question  involved  in  this  case  was  before  the  court  of  chan- 
cery of  Tennessee  in  Pullman  Southern  Car  Co  v.  Gaines,  3  Tenn. 
Ch.  587,  on  the  same  facts,  as  to  the  privilege  tax  for  1877.  That 
court  held  (and  it  is  stated  that  the  Supreme  Court  of  Tennessee, 
on  appeal,  affirmed  its  ruling),  that  this  privilege  tax,  as  to  such 
of  the  cars  as  passed  and  repassed  through  the  State,  and  did  not 
abide  in  it,  was  not  amenable  to  the  objection  that  it  interfered 
with  inter-State  commerce.  The  view  taken  was  that  the  property 
of  the  foreign  corporation,  used  in  Tennessee,  could  be  taxed  as 
property  or  by  an  excise  on  its  use;  and  that  the  tax  in  this  case 
was  not  directly  on  the  object  of  commerce,  or  directly  aimed  at 
commerce.  We  have  given  to  the  views  set  forth  by  the  Tennessee 
Chancery  Court  the  consideration  due  to  the  judgments  of  that  tri- 
bunal, but  are  unable  to  concur  in  its  conclusion. 

Judgment  affirmed. 

See  Pullman  Palace  Car  Co.  v.  Pennsylvania,  141  U.  S.  18,  infra,  which 
limits  the  application  of  the  principal   case. 


OSBORNE  V.  FLORIDA. 

Supreme  Court  of  the  United  States.     October,  1896. 
164  United  States,  650. 

Mr.  Justice  PECKHAM,  after  stating  the  case,  delivered  the 
opinion  of  the  court. 

The  criminal  proceedings  against  the  plaintiff  in  error  were 
taken  by  virtue  of  a  statute  of  Florida,  known  as  chapter  4115,  ap- 
proved June  2,  1893.  The  ninth  section  of  that  chapter  provides 
that:  "No  person  shall  engage  in  or  manage  the  business,  profes- 
sion or  occupation  mentioned  in  this  section,  unless  a  state  license 
shall  have  been  procured  from  the  tax  collector 


OSBOJRNE  V.  FLORIDA.  Ill 

The  twelfth  subdivision  provides,  among  other  things,  that  "all 
express  companies  doing  business  in  this  state  shall  pay  .... 

a  license  tax Any  express  company  violating  this 

provision,  and  any  person  that  knowingly  acts  as  agent  for  any  ex- 
press company  before  it  has  paid  the  above  tax,  payable  by  such 
company,  shall  be  deemed  guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof,  shall  be  punished  by  a  fine  of  not  less  than  fifty 
dollars,  or  confined  in  the  county  jail  not  less  than  six  months." 

In  addition  to  the  criminal  penalty  above  set  forth,  section  10 
provides  that  the  payment  of  all  licenses  taxed  may  be  enforced  by 
the  seizure  and  sale  of  property  by  the  collector. 

The  plaintiff  in  error  assigns  two  grounds  upon  which  he  seeks 
for  a  reversal  of  the  judgment  of  the  state  court.  One  is  based 
upon  the  allegation  that  the  statute,  so  far  as  regards  the  Southern 
Express  Company  or  himself  as  its  agent,  violates  the  commerce 
clause  of  the  Federal  Constitution,  in  that  it  assumes  to  regulate 
interstate  commerce 

It  may  be  here  assumed  that  if  the  statute  applied  to  the  express 
company  in  relation  to  its  interstate  business,  it  would  be  void  as 
an  attempted  interference  with  or  regulation  of  interstate  com- 
merce. 

The  particular  construction  to  be  given  to  this  state  statute  is  a 
question  for  the  state  court  to  deal  with,  and  in  such  a  case  as  this 
we  follow  the  construction  given  by  the  state  court  to  the  statutes 
of  its  own  State.  Leffingwell  v.  Warren,  2  Black.  599;  People  v. 
Weaver,  100  U.  S.,  539,  541;  Noble  v.  Mitchell,  164  U.  S.  367., 
372,  and  cases  there  cited. 

The  Supreme  Court  of  Florida  has  construed  the  ninth  section  of 
this  act  and  has  held  in  express  terms  that  it  does  not  apply  to  or 
affect  in  any  manner  the  business  of  this  company  which  is  inter- 
state in  its  character;  that  it  applies  to  and  affects  only  its  busi- 
ness which  is  done  within  the  State,  or  is,  as  it  is  termed,  "local"' 
in  its  character,  and  it  has  held  that  under  the  statute  so  long  as 
the  express  company  confines  its  operations  to  express  business  that 
consists  of  interstate  or  foreign  commerce,  it  is  wholly  exempt 
from  the  legislation  in  question.  It  has  added,  however,  that  under 
the  provisions  of  the  statute,  if  the  company  engage  in  business 
within  the  State  of  a  local  nature  as  distinguished  from  an  inter- 
state or  foreign  kind  of  commerce,  it  becomes  subject  to  the  statute 
so  far  only  as  concerns  its  local  business,  notwithstanding  it  may 
at  the  same  time  engage  in  interstate  or  foreign  commerce.  In  other 
words,  this  statute  as  construed  by  the  Supreme  Court  of  Florida 


112  LIMITATIONS  OF  THE  TAXING  POWEH, 

does  not  exempt  the  express  company  from  taxation  upon  its  busi- 
ness which  is  solely  within  the  State,  even  though  at  the  same  time 
the  same  company  may  do  a  business  which  is  interstate  in  its  char- 
acter, and  that  as  to  the  latter  kind  of  business  the  statute  does  not 
apply  to  or  affect  it.  As  thus  construed,  we  have  no  doubt  as  to 
the  correctness  of  the  decision  that  the  act  does  not  in  any  manner 
violate  the  Federal  Constitution. 

The  case  of  Crutcher  v.  Kentucky,  14-1  TT  S.,  47,  is  not  in  the 
slightest  degree  opposed  to  this  view.  The  act  which  was  held  to 
be  in  violation  of  the  Federal  Constitution  in  that  case  prohibited 
the  agent  of  a  foreign  express  company  from  carrying  on  business 
at  all  in  that  State  without  first  obtaining  a  license  from  the  State. 
The  company  was  thus  prevented  from  doing  any  business,  even  of 
an  interstate  character,  without  obtaining  the  license  in  question. 
The  act  was  held  to  be  a  regulation  of  interstate  commerce  in  its 
application  to  corporations  or  associations  engaged  in  that  business, 
and  that  subject  was  held  to  belong  exclusively  to  national  and  not 
state  legislation. 

It  has  never  been  held,  however,  that  when  the  business  of  the 
company,  which  is  wholly  within  the  State,  is  but  a  mere  incident 
of  its  interstate  business,  such  fact  would  furnish  any  obstacle  to 
the  valid  taxation  by  the  State  of  the  business  of  the  company 
which  is  entirely  local.  So  long  as  the  regulation  as  to  the  license 
or  taxation  does  not  refer  to  and  is  not  imposed  upon,  the  business 
of  the  company  which  is  interstate,  there  is  no  interference  with 
that  commerce  by  the  state  statute.  It  was  stated  by  Mr.  Justice 
Bradley,  in  the  course  of  his  opinion  in  the  Crutcher  case,  that: 
"Taxes  or  license  fees  in  good  faith  imposed  exclusively  on  express 
business  carried  on  wholly  within  the  State  would  be  open  to  no 
such  objection,"  viz. :  an  objection  that  the  tax  or  license  was  a  reg- 
ulation of  or  that  it  improperly  affected  interstate  commerce.  We 
have  no  doubt  that  this  is  a  correct  statement  of  the  law  in  that  re- 
gard. The  statute  herein  differs  from  the  cases  where  statutes  upon 
this  subject  have  been  held  void,  because  in  those  cases  the  statutes 
prohibited  the  doing  of  any  business  in  the  State  whatever  unless 
upon  the  payment  of  the  fee  or  tax.  It  was  said  as  to  those  cases 
that  the  law  made  the  payment  of  the  fee  or  the  obtaining  of  the 
license  a  condition  of  the  right  to  do  any  business  whatever,  wheth- 
er interstate  or  purely  local,  it  was  on  that  account  a  regulation  of 
interstate  commerce,  and,  therefore,  void.  Here,  however,  under 
the  construction  as  given  by  the  state  court,  the  company  suffers  no 
harm  from  the  provisions  of  the  statute.  It  can  conduct  its  inter- 


BROWN  V.  HOUSTON.  113 

state  business  without  paying  the  slightest  heed  to  the  act,  because 
it  does  not  apply  to  or  in  any  degree  affect  the  company  in  regard 
to  that  portion  of  its  business  which  it  has  the  right  to  conduct 
without  regulation  from  the  State. 

The  company  in  this  case  need  take  out  no  license  and  pay  no 
tax  for  doing  interstate  business,  and  the  statute  is  therefore  valid. 

Upon  the  construction  given  it  by  the  state  court  the  statute  does 
not  violate  any  provision  of  the  Federal  Constitution,  and  the  judg- 
ment of  that  court  is,  therefore, 

Affirmed. 


BROWN  V.  HOUSTON. 

Supreme  Court  of  the  United  States.     October,  1884. 
114  United  States,  622. 

This  was  a  suit  in  the  nature  of  a  bill  in  equity  to  restrain  the 
defendants,  who  were  defendants  in  error  here,  from  collecting  a 
tax,  imposed  upon  personal  property  by  the  authorities  of  the 
State  of  Louisiana.  The  facts  which  make  the  case  are  stated  in 
the  opinion  of  the  court. 

Mr.  Justice  BRADLEY  delivered  the  opinion  of  the  court. 

This  suit  was  brought  by  the  plaintiffs  in  error  in  the  Civil  Dis- 
trict Court  for  the  Parish  of  Orleans,  State  of  Louisiana,  30th 
December,  1880,  to  enjoin  the  defendant,  Houston,  from  seizing 
and  selling  a  certain  lot  of  coal  belonging  to  the  plaintiffs,  situated 
in  New  Orleans.  They  alleged  in  their  petition  that  they  were 
residents  and  did  business  in  Pittsburg,  State  of  Pennsylvania;  that 
Houston,  State  tax  collector  of  the  upper  District  of  the  Parish  of 
Orleans,  had  officially  notified  Brown  &  Jones,  the  agents  of  the 
plaintiffs  in  New  Orleans,  that  they  (Brown  &  Jones)  were  indebted 
to  the  State  of  Louisiana  in  the  sum  of  $352.80;  state  tax  for  the 
year  1880  upon  a  certain  lot  of  Pittsburg  coal  assessed  as  their 
property,  and  valued  at  $58,800;  that  they  (Brown  &  Jones)  were 
delinquents  for  said  tax,  and  that  he,  said  tax  collector,  was  about 
to  seize,  advertise  and  sell  said  coal  to  pay  said  tax,  as  would  ap- 
pear by  a  copy  of  the  notice  annexed  to  the  petition.  The  plain- 
tiffs alleged  that  they  were  not  indebted  to  the  State  of  Louisiana 
for  said  tax;  that  they  were  the  sole  owners  of  the  coal,  and  were 
not  liable  for  any  tax  thereon,  having  paid  all  taxes  legally  due  for 


114  LIMITATIONS  OF  THE  TAXING  PO\VK.]{. 

the  year  1880  on  said  coal  in  Pennsylvania;  and  that  the  said  coal 
was  simply  under  the  care  of  Brown  &  Jones  as  the  agents  of  the 
plaintiffs  in  New  Orleans,  for  sale.  They  further  alleged  that  said 
coal  was  mined  in  Pennsylvania,  and  was  exported  from  said  State 
and  imported  into  the  State  of  Louisiana  as  their  property,  and 
was  then  (at  the  time  of  the  petition),  and  had  always  remained,  in 
its  original  condition,  and  never  had  been  or  become  mixed  or  in- 
corporated with  other  property  in  the  State  of  Louisiana. 

That  when  said  assessment  was  made,  the  said  coal  was  afloat  in 
the  Mississippi  river  in  the  Parish  of  Orleans,  in  the  original  con- 
dition in  which  it  was  exported  from  Pennsylvania,  and  the  agent?, 
Brown  &  Jones,  notified  the  board  of  assessors  of  the  parish  that 
the  coal  did  not  belong  to  them,  but  to  the  plaintiffs,  and  was  held 
as  before  stated,  and  was  not  subject  to  taxation,  and  protested 
against  the  assessment  for  that  purpose.  The  plaintiffs  averred 
that  the  assessment  of  the  tax  and  any  attempt  to  collect  the  same 
were  illegal  and  oppressive,  and  contrary  to  the  Constitution  of  the 
United  States,  Article  1,  Section  8,  paragraphs  1  and  3,  and  Sec- 
tion 10,  paragraph  2;  and  therefore  prayed  an  injunction  to  prevent 
the  seizure  and  sale  of  the  coal,  which,  upon  giving  the  requisite 
bond,  was  granted. 

The  defendant  answered  with  a  general  denial,  but  admitting  the 
assessment  of  the  tax  and  the  intention  to  sell  the  property  for 
payment  thereof. 

Upon  the  case  as  thus  made  the  District  Court  of  the  parish  dis- 
solved the  injunction  and  dismissed  the  suit.  On  appeal  to  the 
Supreme  Court  of  Louisiana,  the  judgment  was  affirmed,  and  the 
case  is  now  here  by  writ  of  error  to  the  judgment  of  the  Supreme 
Court. 

The  following  errors  have  been  assigned: 

"The  lower  court  erred  in  holding: 

"1st.  That  the  tax  in  question  did  not  violate  Article  4,  Section 
2,  Clause  1,  of  the  Federal  Constitution. 

"2d.  That  it  did  not  violate  Article  1,  Section  8,  Clause  3,  of 
the  same-  instrument. 

"3d.  That  it  did  not  violate  Article  1,  Section  10,  Clause  2,  of 
the  same  instrument. 

The'  clauses  here  referred  to  are  these : 

1.  "The  citizens  of  each  State  shall  be  entitled  to  all  privileges 
and  immunities  of  citizens  in  the  several  States." 


BROWN  V.  HTOUSTON.  115 

2.  "The  Congress  shall  have  power  to  regulate  commerce  with 
foreign  nations,  and  among  the  several  States,  and  with  the  Indian 
tribes.'"' 

3.  "No   State  shall,   without  the  consent  of  the   Congress,  lay 
any  imposts  or  duties  on  imports  or  exports,  except  what  may  be 
absolutely  necessary  for  executing  its  inspection  laws/' 

It  was  decided  by  this  court  in  the  case  of  Woodruff  v.  Parham, 
8  Wall.  123,  that  the  term  "imports"  as  used  in  that  clause  of  the 
Constitution  which  declares  that  "no  State  shall,  without  the  con- 
sent of  Congress,  lay  any  imposts  or  duties  on  imports  or  exports," 
does  not  refer  to  articles  carried  from  one  State  into  another,  but 
only  to  articles  imported  from  foreign  countries  into  the  United 
States. 

The  other  assumption  made  under  that  assignment,  that  some  of 
the  coal  was  afterwards  exported,  and  that  the  tax  complained  of 
was  therefore  pro  tanto  a  duty  on  exports,  is  equally  untenable. 
When  the  petition  was  filed  the  coal  was  lying  in  New  Orleans,  in 
the  hands  of  Brown  &  Jones,  for  sale.  The  petition  states  this  in 
so  many  words,  and  Rootes  testifies  the  same  thing,  and  adds  that 
it  was  to  be  sold  by  the  flat-boat  load.  He  also  adds  that  at  the 
time  of  his  examination  more  than  half  of  it  had  been  exported  to 
foreign  countries;  but  he  probably  means  that  it  had  been  sold  to 
steamers  sailing  to  foreign  ports  for  use  on  the  same,  and  had 
only  been  exported  in  that  way.  The  complainants  were  not  ex- 
porters; they  did  not  hold  the  coal  at  New  Orleans  for  exportation, 
but  for  sale  there.  Being  in  New  Orleans,  and  held  there  on  sale, 
without  reference  to  the  destination  or  use  which  the  purchasers 
might  wish  to  make  of  it,  it  was  taxed  in  the  hands  of  the  owners 
(or  their  agents)  like  all  other  property  in  the  city,  six  mills  on 
the  dollar.  If  after  this,  and  after  being  sold,  the  purchaser 
thought  proper  to  put  it  on  board  of  a  steamer  bound  to  foreign 
parts,  that  did  not  alter  the  character  of  the  taxation  so  as  to  con- 
vert it  from  a  general  tax  to  a  duty  on  exports.  When  taxed  it  was 
not  held  with  the  intent  or  for  the  purpose  of  exportation,  but 
with  the  intent  and  for  the  purpose  of  sale  there,  in  New  Orleans. 
A  duty  on  exports  must  either  be  a  duty  levied  on  goods  as  a  condi- 
tion, or  by  reason  of  their  exportation,  or,  at  least,  a  direct  tax  or 
duty  on  goods  which  are  intended  for  exportation.  Whether  the 
last  would  be  a  duty  on  exports,  it  is  not  :  ecessary  to  determine. 
But  certainly,  where  a  general  tax  is  laid  on  all  property  alike, 


116  LIMITATIONS  OF  THE  TAXING  POWER. 

it  cannot  be  construed  as  a  duty  on  exports  when  falling  upon 
goods  not  then  intended  for  exportation,  though  they  should  hap- 
pen to  be  exported  afterwards.  This  is  the  most  that  can  be  said 
of  the  goods  in  question,  and  we  are,  therefore,  of  opinion  that 
the  tax  was  not  a  duty  on  exports  any  more  than  it  was  a  duty  on 
imports,  within  the  meaning  of  those  terms  in  the  clause  under 
consideration. 

But  in  holding,  with  the  decision  in  Woodruff  v.  Parham,  that 
goods  carried  from  one  State  to  another  are  not  imports  or  ex- 
ports within  the  meaning  of  the  clause  which  prohibits  a  State 
from  laying  any  impost  or  duty  on  imports  or  exports,  we  do  not 
mean  to  be  understood  as  holding  that  a  State  may  levy  import 
or  export  duties  on  goods  imported  from  or  exported  to  another 
State.  We  only  mean  to  say  that  the  clause  in  question  does  not 
prohibit  it.  Whether  the  laying  of  such  duties  by  a  State  would 
not  violate  some  other  provision  of  the  Constitution,  that,  for  ex- 
ample, which  gives  to  Congress  the  power  to  regulate  commerce 
with  foreign  nations,  among  the  several  States,  and  with  the 
Indian  tribes,  is  a  different  question.  This  brings  us  to  the  con- 
sideration of  the  second  assignment  of  error,  which  is  founded  on 
the  clause  referred  to. 

The  power  to  regulate  commerce  among  the  several  States  is 
granted  to  Congress  in  terms  as  absolute  as  is  the  power  to  regulate 
commerce  with  foreign  nations.  If  not  in  all  respects  an  exclusive 
power;  if,  in  the  absence  of  congressional  action,  the  States  may 
continue  to  regulate  matters  of  local  interest  only  incidentally 
affecting  foreign  and  interstate  commerce,  such  as  pilots,  wharves, 
harbors,  roads,  bridges,  tolls,  freights,  etc.,  still,  according  to  the 
rule  laid  down  in  Cooley  v.  Board  of  Wardens  of  Philadelphia,  12 
How.  299,  319,  the  power  of  Congress  is  exclusive  wherever  the 
matter  is  national  in  its  character  or  admits  of  one  uniform  sys- 
tem or  plan  of  regulation;  and  is  certainly  so  far  exclusive  that  no 
State  has  power  to  make  any  law  or  regulation  which  will  affect  the 
free  and  unrestrained  intercourse  and  trade  between  the  States,  as 
Congress  has  left  it,  or  which  will  impose  any  discriminating  bur- 
den or  tax  upon  the  citizens  or  products  of  other  States,  coming  or 
brought  within  its  jurisdiction.  All  laws  and  regulations  are  re- 
strictive of  natural  freedom  to  some  extent,  and  where  no  regulation 
is  imposed  by  the  grovernment  which  has  the  exclusive  power  to 
regulate,  it  is  an  indication  of  its  will  that  the  matter  shall  be  left 
free.  So  long  as  Congress  does  not  pass  any  law  to  regulate  com- 
merce among  the  several  States,  it  thereby  indicates  its  will  that 


BROWN  V.  HOUSTON.  11? 

that  commerce  shall  be  free  and  untrammelled;  and  any  regulation 
of  the  subject  by  the  States  is  repugnant  to  such  freedom.  This 
has  frequently  been  laid  down  as  law  in  the  judgments  of  this 
court.  In  Welton  v.  State  of  Missouri,  91  U.  ,S.,  282,  Mr.  Justice 
Field,  speaking  for  the  court,  said:  "The  fact  that  Congress  has 
not  seen  fit  to  prescribe  any  specific  rules  to  govern  interstate  com- 
merce does  not  affect  the  question.  Its  inaction  on  this  subject, 
when  considered  with  reference  to  its  legislation  with  respect  to 
foreign  commerce,  is  equivalent  to  a  declaration  that  interstate 
commerce  shall  be  free  and  untrammelled."  This  was  said  in  a 
case  where  the  plaintiff  in  error  had  been  convicted  of  selling 
goods  without  a  license  under  a  law  of  the  State  of  Missouri,  which 
prohibited  any  person  from  dealing  as  a  peddler  without  a  license, 
and  which  declared  that  a  peddler  was  one  dealing  in  goods  or 
wares  "not  the  growth,  produce  or  manufacture  of  this  State, 
[Missouri]  by  going  from  place  to  place  to  sell  the  same."  . 


In  the  case  of  Railroad  Co.  v.  Husen,  95  U.  S.,  465,  469,  in 
which  another  law  of  the  State  of  Missouri  came  up  for  considera- 
tion, which  declared  that  no  Texas,  Mexican  or  Indian  cattle  should 
be  driven,  or  otherwise  conveyed  into  the  State  between  the  1st  of 
May  and  the  1st  of  November,  unless  carried  through  the  State  in 
cars,  without  being  unloaded,  this  court,  through  Mr.  Justice 
Strong,  said:  "It  seems  hardly  necessary  to  argue  at  length  that, 
unless  the  statute  can  be  justified  as  a  legitimate  exercise  of  the 
police  power  of  the  State,  it  is  a  usurpation  of  the  power  vested 
exclusively  in  Congress.  It  is  a  plain  regulation  of  interstate  com- 
merce, a  regulation  extending  to  prohibition.  Whatever  may  be 
the  power  of  a  State  over  commerce  that  is  completely  internal,  it 
can  no  more  prohibit  or  regulate  that  which  is  interstate  than  it 
can  that  which  is  with  foreign  nations."  In  short,  it  may  be  laid 
down  as  the  settled  doctrine  of  this  court,  at  this  day,  that  a  State 
can  no  more  regulate  or  impede  commerce  among  the  several  States 
than  it  can  regulate  or  impede  commerce  with  foreign  nations. 

This  being  the  recognized  law,  the  question  then  arises  whether 
the  assessment  of  the  tax  in  question  amounted  to  any  interference 
with  or  restriction  upon  the  free  introduction  of  the  plaintiffs'  coal 
from  the  State  of  Pennsylvania  into  the  State  of  Louisiana,  and 
the  free  disposal  of  the  same  in  commerce  in  the  latter  State;  in 
other  words,  whether  the  tax  amounted  to  a  regulation  of,  or  re- 
striction upon,  commerce  among  the  States:  or  only  to  an  exercise 
of  local  adminstration  under  the  general  taxing  power,  which, 


118  LIMITATIONS  OF  THE  TAXING  POWER. 

though  it  may  incidentally  affect  the  subjects  of  commerce,  is  en- 
tirely within  the  power  of  the  State  until  Congress  shall  see  fit 
to  interfere  and  make  express  regulations  on  the  subject. 

As  to  the  character  and  mode  of  the  assessment,  little  need  be 
added  to  what  has  already  been  said.  It  was  not  a  tax  imposed 
upon  the  coal  as  a  foreign  product,  or  as  the  product  of  any  other 
State  than  Louisiana,  nor  a  tax  imposed  by  reason  of  the  coal  being 
imported  or  brought  into  Louisiana,  nor  a  tax  imposed  whilst  it 
was  in  a  state  of  transit  through  that  State  to  some  other  place 
of  destination.  It  was  imposed  after  the  coal  had  arrived  at  its 
destination  and  was  put  up  for  sale.  The  coal  had  come  to  its 
place  of  rest,  for  final  disposal  or  use,  and  was  a  commodity  in 
the  market  of  New  Orleans.  It  might  continue  in  that  condition 
for  a  year  or  two  years,  or  only  for  a  day.  It  had  become  part 
of  the  general  mass  of  property  in  the  State,  and  as  such  it  was 
taxed  for  the  current  year  (1880),  as  all  other  property  in  the  city 
of  New  Orleans  was  taxed.  Under  the  law,  it  could  not  be  taxed 
again  until  the  following  year.  It  was  subjected  to  no  discrimina- 
tion in  favor  of  goods  which  were  the  product  of  Louisiana,  or 
goods  which  were  the  property  of  citizens  of  Louisiana.  It  was 
treated  in  exactly  the  same  manner  as  such  goods  were  treated. 

It  cannot  be  seriously  contended,  at  least  in  the  absence  of  any 
congressional  legislation  to  the  contrary,  that  all  goods  which  are 
the  product  of  other  States  are  to  be  free  from  taxation  in  the 
State  to  which  they  may  be  carried  for  use  or  sale.  Take  the 
city  of  New  York  for  example.  When  the  assessor  of  taxes  goes 
his  round,  must  he  omit  from  his  list  of  taxables  all  goods  which 
have  come  into  the  city  from  the  factories  of  New  England  and 
New  Jersey,  or  from  the  pastures  and  grain  fields  of  the  west? 
If  he  must,  what  will  be  left  for  taxation?  And  how  is  he  to 
distinguish  between  those  goods  which  are  taxable  and  those  which 
are  not?  With  the  exception  of  goods  imported  from  foreign 
countries,  still  in  the  original  packages,  and  goods  in  transit  to 
some  other  place,  why  may  he  not  assess  all  property  alike  that 
may  be  found  in  the  city,  being  there  for  the  purpose  of  remain- 
ing there  till  used  or  sold,  and  constituting  part  of  the  great  mass 
of  its  commercial  capital — provided  always,  that  the  assessment  be  a 
general  one,  and  made  without  discrimination  between  goods  the 
product  of  New  York,  and  goods  the  product  of  other  States?  Of 
Bourse  the  assessment  should  be  a  general  one,  and  not  discriminative 
between  goods  of  different  States.  The  taxing  of  goods  coming 
from  other  States,  as  such,  or  by  reason  of  their  coming,  would  be 


BROWN  V.  HOUSTON.  119 

a  discriminating  tax  against  them  as  imports,  and  would  be  a  regu- 
lation of  interstate  commerce,  inconsistent  with  that  perfect  freedom 
of  trade  which  Congress  has  seen  fit  should  remain  undisturbed. 
But  if,  after  their  arrival  within  the  State, — that  being  their  place 
of  destination  for  use  or  trade, — if,  after  this,  they  are  subjected  to 
a  general  tax  laid  alike  on  all  property  within  the  city,  we  fail  to 
see  how  such  a  taxing  can  be  deemed  a  regulation  of  commerce 
which  would  have  the  objectionable  effect  referred  to. 

We  do  not  mean  to  say  that  if  a  tax  collector  should  be  stationed 
at  every  ferry  and  railroad  depot  in  the  City  of  New  York,  charged 
with  the  duty  of  collecting  a  tax  on  every  wagon  load,  or  car  load 
of  produce  and  merchandise  brought  into  the  city,  that  it  would  not 
be  a  regulation  of,  and  restraint  upon  interstate  commerce,  so  far 
as  the  tax  should  be  imposed  on  articles  brought  from  other  States. 
We  think  it  would  be,  and  that  it  would  be  an  encroachment  upon 
the  exclusive  powers  of  Congress.  It  would  be  very  different  from 
the  tax  laid  on  auction  sales  of  all  property  indiscriminately,  as  in 
the  case  of  Woodruff  v.  Parham,  which  had  no  relation  to  the  move- 
ment of  goods  from  one  State  to  another.  It  would  be  very  differ- 
ent from  a  tax  laid,  as  in  the  present  case,  on  property  which  had 
reached  its  destination,  and  had  become  part  of  the  general  mass  of 
property  of  that  city,  and  which  was  only  taxed  as  a  part  of  that 
general  mass  in  common  with  all  other  property  in  the  city,  and  in 
precisely  the  same  manner. 

When  Congress  shall  see  fit  to  make  a  regulation  on  the  subject  of 
property  transported  from  one  State  to  another,  which  may  have  the 
effect  to  give  it  a  temporary  exemption  from  taxation  in  the  State  to 
which  it  is  transported,  it  will  be  time  enough  to  consider  any  con- 
flict that  may  arise  between  such  regulation  and  the  general  taxing 
laws  of  the  State.  In  the  present  case,  we  can  see  no  such  conflict, 
either  in  the  law  itself  or  in  the  proceedings  which  have  been  had 
under  it  and  sustained  by  the  State  tribunals,  nor  any  conflict  with 
the  general  rule  that  a  State  cannot  pass  a  law  which  shall  inter- 
fere with  the  unrestricted  freedom  of  commerce  between  the  States. 

In  our  opinion,  therefore,  the  second  assignment  of  error  is  unten- 
able. 

The  only  remaining  assignment  of  error  to  be  considered  is,  that 
the  tax  in  question  violated  that  clause  of  the  Fourth  Article  of  the 
Constitution  which  declares  that  "the  citizens  of  each  State  shall  be 
entitled  to  all  privileges  and  immunities  of  citizens  in  the  several 
States."  As  the  applicability  of  this  objection  did  not  occur  to  us 
upon  reading  the  record  of  the  case,  we  have  carefully  examined  the 


120  LIMITATIONS  OF  THE  TAXING  POWER. 

brief  of  the  plaintiffs'  counsel  for  light  on  the  subject,  but,  so  far 
as  we  can  understand,  the  point  is  not  urged.  We  are  certainly  un- 
able to  see  how,  or  in  what  respect,  any  equality  of  privileges  as 
citizens  has  been  denied  to  the  plaintiffs  by  the  imposition  of  the 
tax.  Their  property  was  only  taxed  like  that  of  all  other  persons, 
whether  citizens  of  Louisiana  or  any  other  State  or  country.  Not 
the  slightest  discrimination  was  made. 

The  judgment  of  the  Supreme  Court  of  Louisiana  is 

Affirmed. 


WESTERN  UNION  TELEGRAPH  CO.  V.  BOROUGH  OF  NEW 

HOPE. 

Supreme  Court  of  the  United  States.     October,  1902. 
187  United  States,  419. 

By  an  ordinance  passed  in  1894,  the  borough  of  New  Hope, 
Pennsylvania,  imposed  an  annual  license  fee  of  one  dollar  per  pole 
and  two  dollars  and  a  half  per  mile  of  wire  on  the  telegraph,  tele- 
phone, and  electric  light  poles  and  wires  within  its  limits.  The 
Western  Union  Telegraph  Company  had  constructed  prior  thereto 
and  had  since  maintained  and  operated  a  line  of  telegraph  poles  and 
wires  through  the  borough,  and  this  was  an  action  brought  in  the 
Court  of  Common  Pleas  of  Bucks  county,  in  that  State,  against  the 
company  to  recover  license  fees  for  the  four  years  commencing  with 
1895.  The  case  came  on  for  trial  before  the  court  and  a  jury,  and 
plaintiff  put  in  evidence  the  ordinance  in  question,  and  it  was 
agreed  "between  the  parties  that  for  the  year  beginning  October  1, 
1895,  there  were  seventy-five  poles  and  twenty  miles  of  wire,  and 
for  the  three  succeeding  years  beginning  October  1,  1896,  there  were 
thirty-six  poles  and  twelve  miles  of  wire  maintained  by  the  defend- 
ant in  said  borough."  Plaintiff  then  rested,  and  defendant  offered 
evidence  tending  to  show  that  the  wires  were  used  as  through  wires, 
for  the  transmission  of  messages  between  the  different  States,  and 
the  United  States  and  foreign  countries;  that  the  company  had  no 
office  at  New  Hope,  which  it  operated  itself,  but  that  the  Philadel- 
phia and  Reading  Railroad  Company  handled  the  business  there, 
and  transferred  it  to  the  Western  Union  at  Philadelphia;  that  no 
part  of  the  business  that  went  to  or  from  New  Hope  went  over 
these  lines  of  wires  and  poles;  and  that  the  local  business  handed 
to  the  Western  Union  at  Philadelphia  amounted  to  from  about 


W.  U.  TEL.  CO.  V.  NEW  HOPE.  121 

seven  to  seven  and  one-half  dollars  per  month.  The  evidence  fur- 
ther tended  to  show  that  the  cost  value  of  its  lines  through  New 
Hope  was  about  $372,  and  that  the  cost  of  inspection,  repairs  and 
maintenance  of  the  plant  of  the  company  had  averaged  for  thirteen 
years  one  dollar  and  forty-nine  and  one-half  cents  per  wire  per  an- 
num; that  since  October,  1894,  the  borough  had  not  expended  any 
money  on  account  of  the  poles  and  wires  of  the  company;  that  its 
expenditures  were  for  repairing  streets,  street  lamps,  moderate  sums 
in  payment  of  official  services,  etc.,  and  that  when  on  holidays  the 
burgess  saw  fit  to  appoint  a  policeman  he  often  called  on  the  con- 
stable, who  was  generally  paid  $2.50  per  day.  A  lineman  testified 
that  during  those  years  the  borough  never  did  anything,  to  his 
knowledge,  "in  the  way  of  inspecting  or  repairing  or  removing  or 
anything  else  in  connection  with  the  poles  and  wires  of  those  tele- 
graph companies."  Defendants  contended  that  the  requirement  of 
payment  of  the  license  fee  in  question  amounted  to  a  regulation  of 
commerce,  and  that  the  ordinance  was  therefore  void. 

The  court  left  it  to  the  jury  to  find  whether  the  license  fee  ex- 
ceeded what  was  reasonable  under  the  circumstances.  The  jury  re- 
turned a  verdict  in  favor  of  the  plaintiff,  and  judgment  was  ren- 
dered thereon,  which  on  error  to  the  Superior  Court  was  affirmed. 
16  Pa.  Superior  Ct.  Rep.,  306.  The  Supreme  Court  of  Pennsyl- 
vania refused  to  allow  an  appeal  to  that  court. 

Mr.  Chief  Justice  FULLER,  after  making  the  foregoing  statement, 
delivered  the  opinion  of  the  court. 

It  is  conceded  that  the  borough  had  the  right  in  the  exercise  of 
its  police  power  to  impose  a  reasonable  license  fee  upon  telegraph 
poles  and  wires  within  its  limits,  and  that  an  ordinance  imposing 
such  fee  is  to  be  taken  as  prima  facie  reasonable.  But  it  is  insisted 
that  on  the  evidence  of  this  case  the  presumption  of  reasonableness 
is  rebutted,  and  that  the  ordinance  as  administered  is  void  because 
a  regulation  of  interstate  commerce.  While  in  the  exercise  of  its 
control  over  its  streets,  it  is  admitted  that  the  borough  may  super- 
vise the  location  of  the  poles  erected  to  sustain  the  wires  of  the 
plaintiff  in  error,  may  require  them  to  be  marked,  may  make  such 
inspection  of  them  as  may  be  necessary  to  protect  the  public  wel- 
fare, and  may  impose  a  reasonable  license  fee  for  the  cost  of  such 
regulation  and  supervision,  and  of  the  issuing  of  such  permits  as 
may  be  required  for  the  enforcement  thereof,  yet  it  is  contended 
that  if  the  license  fee  turned  out  to  be  in  excess  of  the  amount 
necessary  to  reimburse  the  municipality  the  ordinance  became  un- 
reasonable and  invalid.  The  Superior  Court  in  its  opinion  referred 


122  LIMITATIONS  OF  THE  TAXING  POWER. 

to  many  decisions  of  the  Supreme  Court  of  Pennsylvania  as  defi- 
nitely establishing,  among  other  propositions,  "that  in  an  action  to 
recover  the  license  fee  for  a  particular  year,  the  same  being  payable 
at  the  beginning  of  the  year,  the  fact  that  the  borough  or  city  did 
not  expend  money  for  inspection,  supervision,  or  police  surveillance 
of  the  poles  and  wires  in  that  year  is  not  a  defence,"  and  "that  the 
courts  will  not  declare  such  ordinance  void  because  of  the  alleged 
unreasonableness  of  the  fee  charged,  unless  the  unreasonableness  be 
so  clear  as  to  demonstrate  an  abuse  of  discretion  on  the  part  of  the 
municipal  authorities."  And  it  was  said  that  in  many  of  the  cases 
cited  the  license  fee  was  the  same  as  that  imposed  by  this  ordinance. 
16  Superior  Ct.  Rep.,  309.  The  Supreme  Court  affirmed  the  judg- 
ment in  a  similar  case  on  the  opinion  given  below  in  this.  202  Pa. 
St.,  532. 

In  Chester  City  v.  Telegraph  Company,  154  Pa.  St.,  464,  in 
which  it  was  averred  in  the  affidavit  of  defence  that  the  rates  charged 
were  at  least  five  times  the  amount  of  the  expense  involved  in  the 
supervision  exercised  by  the  municipality,  the  Supreme  Court  said: 
"For  the  purposes  of  this  case  we  must  treat  this  averment  as  true, 
as  far  as  it  goes.  The  difficulty  is  it  does  not  go  far  enough.  It 
refers  only  to  the  usual,  ordinary  or  necessary  expense  of  municipal 
officers,  of  issuing  licenses  and  other  expenses  thereby  imposed  upon 
the  municipality.  It  makes  no  reference  to  the  liability  imposed 
upon  the  city  by  the  erection  of  its  telegraph  poles.  It  is  the  duty 
of  the  city  to  see  that  the  poles  are  safe,  and  properly  maintained, 
and  should  a  citizen  be  injured  in  person  or  property  by  reason  of  a 
neglect  of  such  duty,  an  action  might  lie  against  the  city  for  the 
consequences  of  such  neglect.  It  is  a  mistake  therefore  to  measure 
the  reasonableness  of  the  charge  by  the  amount  actually  expended  by 
the  city  for  a  particular  year,  to  the  particular  purposes  specified 
in  the  affidavit." 

In  Taylor  Borough  v.  Telegraph  Company,  202  Pa.  St.,  583,  the 
Supreme  Court  said:  "Clearly  the  reasonableness  of  the  fee  is  not 
to  be  measured  by  the  value  of  the  poles  and  wires  or  of  the  land 
occupied,  nor  by  the  profits  of  the  business.  The  elements  which 
enter  into  the  charge  are  the  necessary  or  probable  expense  incident 
to  the  issuing  of  the  license  and  the  probable  expense  of  such  in- 
spection, regulation  and  police  surveillance  as  municipal  authorities 
may  lawfully  give  to  the  erection  and  maintenance  of  the  poles  and 

wires Whether  or  not  the  fee  is  so  obviously  excessive 

as  to  lead  irresistibly  to  the  conclusion  that  it  is  exacted  as  a  return 
for  the  use  of  the  streets,  or  is  imposed  for  revenue  purposes,  is  a 


STATE  TAX  OX  EAILWAY  GROSS  RECEIPTS.       123 

question  for  the  courts  and  is  to  be  determined  upon  a  view  of  tho 
facts,  not  upon  evidence  consisting  of  the  opinions  of  witnesses  as 
to  the  proper  supervision  that  the  municipal  authorities  might  prop- 
erly exercise  and  the  expense  of  the  same."  And  see  City  of  Phila- 
delphia v.  Western  Union  Telegraph  Company,  89  Fed.  Rep.,  454. 

Concurring  in  these  views  in  general,  we  think  it  would  be  going 
much  too  far  for  us  to  decide  that  the  test  set  up  by  the  plaintiff  in 
error  must  be  necessarily  applied,  and  the  ordinance  held  void  be- 
cause of  a  failure  to  meet  it.  As  the  Supreme  Court  pointed  out, 
the  elements  entering  into  the  charge  are  various,  and  the  Court  of 
Common  Pleas,  the  Superior  Court,  and  the  Supreme  Court  of 
Pennsylvania  have  held  it  to  be  reasonable,  and  we  cannot  say  that 
their  conclusion  is  so  manifestly  wrong  as  to  justify  our  interposi- 
tion. 

The  license  fee  was  not  a  tax  on  tne  property  of  the  company,  or 
on  its  transmission  of  messages,  or  on  its  receipts  from  such  trans- 
mission, or  on  its  occupation,  or  business,  but  was  a  charge  in  the 
enforcement  of  local  governmental  supervision  and  as  such  not  in 
itself  obnoxious  to  the  clause  of  the  Constitution  relied  on.  St. 
Louis  v.  Telegraph  Company,  148  U.  S.,  92;  149  U.  S.,  465. 

Judgment  affirmed. 

Mr.  Justice  WHITE,  Mr.  Justice  PECKHAM  and  Mr.  Justice  Mc- 
KEXNA  dissented. 


STATE  TAX  OX  RAILWAY  GROSS  RECEIPTS. 

Supreme  Court  of  the  United  States.     December,  1872. 
15  Wallace,  284. 

Mr.  Justice  STRONG  delivered  the  opinion  of  the  court. 

The  question  is  whether  the  act  of  the  legislature  of  Pennsylvania, 
passed  February  23d,  1866,  under  which  a  tax  was  levied  upon  the 
Philadelphia  and  Reading  Railroad  Company  of  three-quarters  of 
one  per  cent  upon  the  gross  receipts  of  the  company  during  the  six 
months  ending  December  31st,  1867,  is  in  conflict  with  the  third 
clause  of  the  eighth  section,  article  first,  of  the  Constitution  of  the 
United  States,  which  confers  upon  Congress  the  power  to  "regulate 
commerce  with  foreign  nations,  among  the  several  States  and  with 
the  Indian  tribes;"  or  whether  it  is  in  conflict  with  the  second 
clause  of  the  tenth  section  of  the  same  article,  which  prohibits  the 
States,  "without  the  consent  of  Congress,  from  laying  any  imposts 
or  duties  on  imports  or  exports,  except  what  may  be  absolutely  neces- 


124  LIMITATIONS  OF  THE  TAXING  POWEK. 

sary  for  executing  their  inspection  laws."  It  was  claimed  in  the 
State  courts  that  the  act  was  unconstitutional  so  far  as  it  taxes  that 
portion  of  the  gross  receipts  of  companies  which  are  derived  from 
transportation  from  the  State  to  another  State,  or  into  the  State 
from  another,  and  the  Supreme  Court  of  the  State  having  decided 
adversely  to  the  claim,  the  case  has  been  brought  here  for  review. 

Is,  then,  the  tax  imposed  by  the  act  of  February  23d,  1866,  a  tax 
upon  freight  transported  into,  or  out  of,  the  State,  or  upon  the 
owner  of  freight,  for  the  right  of  thus  transporting  it?  Certainly 
it  is  not  directly.  Very  manifestly  it  is  a  tax  upon  the  railroad  com- 
pany, measured  in  amount  by  the  extent  of  its  business  or  the  de- 
gree to  which  its  franchise  is  exercised.  That  its  ultimate  effect 
may  be  to  increase  the  cost  of  transportation  must  be  admitted.  So 
it  must  be  admitted  that  a  tax  upon  any  article  of  personal  prop- 
erty, that  may  become  a  subject  of  commerce,  or  upon  any  instru- 
ment of  commerce,  affects  commerce  itself.  If  the  tax  be  upon  an 
instrument,  such  as  the  stage-coach,  a  railroad  car,  or  a  canal,  or 
steamboat,  its  tendency  is  to  increase  the  cost  of  transportation. 
Still  it  is  not  a  tax  upon  transportation,  or  upon  commerce,  and  it 
has  never  been  seriously  doubted  that  such  a  tax  may  be  laid.  A 
tax  upon  landlords  as  such  affects  rents,  and  generally  increases 
them,  but  it  would  be  a  misnomer  to  call  it  a  tax  upon  tenants.  A 
tax  upon  the  occupation  of  a  physician  or  an  attorney,  measured  by 
the  income  of  his  profession,  or  upon  a  banker,  graduated  according 
to  the  amount  of  his  discounts  or  deposits,  will  hardly  be  claimed 
to  be  a  tax  upon  his  patients,  clients  or  customers,  thought  the  bur- 
den ultimately  falls  upon  them.  It  is  not  their  money  which  is 
taken  by  the  government.  The  law  exacts  nothing  from  them.  But 
when,  as  in  the  other  case  between  these  parties,  a  company  is  made 
an  instrument  by  the  laws  to  collect  the  tax  from  transporters,  when 
the  statute  plainly  contemplates  that  the  contribution  is  to  come 
from  them,  it  may  properly  be  said  that  they  are  the  person? 
charged.  Such  is  not  this  case.  The  tax  is  laid  upon  the  gross  re- 
ceipts of  the  company;  laid  upon  a  fund  which  has  become  the 
property  of  the  company,  mingled  with  its  other  property,  and  pos- 
sibly expended  in  improvements  or  put  out  at  interest.  The  statute 
does  not  look  beyond  the  corporation  to  those  who  may  have  con- 
tributed to  its  treasury.  The  tax  is  not  levied  and,  indeed,  such  a 
tax  cannot  be,  until  the  expiration  of  each  half-year,  and  until  the 
money  received  for  freights,  and  from  other  sources  of  income,  has 
actually  come  into  the  company's  hands.  Then  it  has  lost  its  dis- 


STATE  TAX  ON  BAILWAY  GROSS  RECEIPTS.       125 

tinctive  character  as  freight  earned,  by  having  become  incorporated 
into  the  general  mass  of  the  company's  property.  While  it  must  be 
conceded  that  a  tax  upon  interstate  transportation  is  invalid,  there 
seems  to  be  no  stronger  reason  for  denying  the  power  of  a  State  to 
tax  the  fruits  of  such  transportation  after  they  have  become  inter- 
mingled with  the  general  property  of  the  carrier,  than  there  is  for 
denying  her  power  to  tax  goods  which  have  been  imported,  after 
their  original  packages  have  been  broken,  and  after  they  have  been 
mixed  with  the  mass  of  general  property  in  the  country.  That  such 
a  tax  is  not  unwarranted  is  plain.  Thus,  in  Brown  v.  Maryland 
(12  Wheat.,  419-441),  where  it  was  ruled  that  a  State  tax  cannot 
be  levied,  by  the  requisition  of  a  license,  upon  importers  of  foreign 
goods  by  the  bale  or  package,  or  upon  other  persons  selling  the  same 
by  bale  or  package,  Chief  Justice  Marshall,  considering  the  dividing 
line  between  the  prohibition  upon  the  States  against  taxing  imports 
and  their  general  power  to  tax  persons  and  property  within  their 
limits,  said  that  "when  the  importer  has  so  acted  upon  the  thing  im- 
ported that  it  has  become  incorporated  and  mixed  up  with  the  mass 
of  property  in  the  country,  it  has,  perhaps,  lost  its  distinctive  char- 
acter as  an  import,  and  has  become  subject  to  the  taxing  power  of 
the  State."  This  distinction  in  the  liabilities  of  property  in  its  dif- 
ferent stages  has  ever  since  been  recognized.  (Waring  v.  The 
Mayor,  8  Wall.,  122;  Pervear  v.  The  Commonwealth,  5  id.,  479.) 
It  is  most  important  to  the  States  that  it  should  be.  And  yet  if 
the  States  may  tax  at  pleasure  imported  goods,  so  soon  as  the  im- 
porter has  broken  the  original  packages,  and  made  the  first  sale,  it 
is  obvious  the  tax  will  obstruct  importation  quite  as  much  as  would 
an  equal  impost  upon  the  unbroken  packages  before  they  have  gone 
to  the  markets.  And  this  is  so  though  no  discrimination  be  made. 

There  certainly  is  a  line  which  separates  that  power  of  the  Fed- 
eral government  to  regulate  commerce  among  the  States,  which  is 
exclusive,  from  the  authority  of  the  States  to  tax  persons'  property, 
business,  or  occupations,  within  their  limits.  This  line  is  sometimes 
difficult  to  define  with  distinctness.  It  is  so  in  the  present  case; 
but  we  think  it  may  be  safely  laid  down  that  the  gross  receipts  of 
railroad  or  canal  companies,  after  they  have  reached  the  treasury 
of  the  carriers,  though  they  may  have  been  derived  in  part  from 
transportation  of  freight  between  States,  have  become  subject  to 
legitimate  taxation.  It  is  not  denied  that  net  earnings  of  such  cor- 
porations are  taxable  by  State  authority  without  any  inquiry  after 
their  sources,  and  it  is  difficult  to  state  any  well-founded  distinction 
between  the  lawfulness  of  a  tax  upon  them  and  that  of  a  tax 


126  LIMITATIONS  OP  THE  TAXING  POWER. 

upon  gross  receipts,  or  between  the  effects  they  work  upon  com- 
merce, except  perhaps  in  degree.  They  may  both  come  from  charges 
made  for  transporting  freight  or  passengers  between  the  States,  or 
out  of  exactions  from  the  freight  itself.  Net  earnings  are  a  part  of 
the  gross  receipts. 

There  is  another  view  of  this  case  to  which  brief  reference  may 
be  made.  It  is  not  to  be  questioned  that  the  States  may  tax  the 
franchises  of  companies  created  by  them,  and  that  the  tax  may  be 
proportioned  either  to  the  value  of  a  franchise  granted,  or  to  the 
extent  of  its  exercise;  nor  is  it  deniable  that  gross  receipts  may  be 
a  measure  of  proximate  value,  or,  if  not,  at  least  of  the  extent  of 
enjoyment.  If  the  tax  be,  in  fact,  laid  upon  the  companies,  adopt- 
ing such  a  measure  imposes  no  greater  burden  upon  any  freight  or 
business  from  which  the  receipts  come  than  would  be  an  equal  tax 
laid  upon  a  direct  valuation  of  the  franchise.  In  both  cases,  the 
necessity  of  higher  charges  to  meet  the  exaction  is  the  same. 

Influenced  by  these  considerations,  we  hold  that  the  act  of  the 
legislature  of  the  State  imposing  a  tax  upon  the  plaintiffs  in  error 
equal  to  three-quarters  of  one  per  cent  of  their  gross  receipts  is  not 
invalid  because  in  conflict  with  the  power  of  Congress  to  regulate 
commerce  among  the  States.  And  under  the  decision  made  in 
Woodruff  v.  Parham  (8  Wall.,  123),  it  is  not  invalid  because  it  lays 
an  impost  or  duty  on  imports  or  exports. 

Judgment  affirmed. 

Mr.  Justice  MILLER  (with  whom  concurred  Justices  FIELD  and 
HUNT),  dissenting. 


PHILADELPHIA,    ETC.,    STEAMSHIP    CO.    V.    PENNSYL- 
VANIA. 

Supreme  Court  of  the  United  States.     October,  1886. 
122  United  States,  326. 

The  question  in  this  case  was,  whether  a  State  can  constitution- 
ally impose  upon  a  steamship  company,  incorporated  under  its  laws, 
a  tax  upon  the  gross  receipts  of  such  company  derived  from  the 
transportation  of  persons  and  property  by  sea,  between  different 
States,  and  to  and  from  foreign  countries. 

Mr.  Justice  BRADLEY,  after  stating  the  case deliv 

ered  the  opinion  of  the  court. 


STEAMSHIP  CO.  V.  PENNSYLVANIA.  127 

The  question  which  underlies  the  immediate  question  in  the  case 
is,  whether  the  imposition  of  the  tax  upon  the  steamship  company's 
receipts  amounted  to  a  regulation  of,  or  an  interference  with,  inter- 
state and  foreign  commerce,  and  was  thus  in  conflict  with  the  power 
granted  by  the  Constitution  to  Congress?  The  tax  was  levied  di- 
rectly upon  the  receipts  derived  by  the  company  from  its  fares  and 
freight  for  the  transportation  of  persons  and  goods  between  different 
states  and  foreign  countries,  and  from  the  charter  of  its  vessels 
which  was  for  the  same  purpose.  This  transportation  was  an  act  of 
interstate  and  foreign  commerce.  It  was  the  carrying  on  of  sucli 
commerce.  It  was  that  and  nothing  else.  In  view  of  the  decisions 
of  this  court,  it  cannot  be  pretended  that  the  state  could  constitu- 
tionally regulate  or  interfere  with  that  commerce  itself.  But  tax- 
ing is  one  of  the  forms  of  regulation.  It  is  one  of  the  principal 
forms.  Taxing  the  transportation,  either  by  its  tonnage,  or  its  dis- 
tance, or  by  the  number  of  trips  performed,  or  in  any  other  way, 
would  certainly  be  a  regulation  of  the  commerce,  a  restriction  upon 
it,  a  burden  upon  it.  Clearly  this  could  not  be  done  by  the  state 
without  interfering  with  the  power  of  Congress.  Foreign  com- 
merce has  been  fully  regulated  by  Congress,  and  any  regulations 
imposed  by  the  states  upon  that  branch  of  commerce  would  be  a  pal- 
pable interference.  If  Congress  has  not  made  any  express  regula- 
tions with  regard  to  interstate  commerce,  its  inaction,  as  we  have 
often  held,  is  equivalent  to  a  declaration  that  it  shall  be  free,  in  all 
cases  where  its  power  is  exclusive;  and  its  power  is  necessarily  ex- 
clusive whenever  the  subject  matter  is  national  in  its  character 
and  properly  admits  of  only  one  uniform  system.  See  the  cases 
collected  in  RolUns  v.  Shelby  Taxing  District,  120  IF.  S.  489,  492, 
493.  Interstate  commerce  carried  on  by  ships  on  the  sea  is  surely 
of  this  character. 

If,  then,  the  commerce  carried  on  by  the  plaintiff  in  error  in 
this  case  could  not  be  constitutionally  taxed  by  the  state,  could  the 
fares  and  freights  received  for  transportation  in  carrying  on  that 
commerce  be  constitutionally  taxed?  If  the  state  cannot  tax  the 
transportation,  may  it,  nevertheless,  tax  the  fares  and  freights  re- 
ceived therefor?  Where  is  the  difference?  Looking  at  the  sub- 
stance of  things,  and  not  at  mere  forms,  it  is  very  difficult  to  see 
any  difference.  The  one  thing  seems  to  be  tantamount  to  the  other. 
It  would  seem  to  be  rather  metaphysics  than  plain  logic  for  the  state 
officials  to  say  to  the  company:  "We  will  not  tax  you  for  the  trans- 
portation you  perform,  but  we  will  tax  you  for  what  you  get  for 


128  LIMITATIONS  OF  THE  TAXING  POWER. 

performing  it."  Such  a  position  can  hardly  be  said  to  be  based  on 
a  sound  method  of  reasoning. 

It  is  necessary,  however,  that  we  should  examine  what  bearing  the 
cases  of  the  State  Freight  Tax  and  Railway  Gross  Receipts,  re- 
ported in  15th  of  Wallace,  have  upon  the  question  in  hand.  These 
cases  were  much  quoted  in  argument,  and  the  latter  was  confidently 
relied  on  by  the  counsel  of  the  Commonwealth.  They  both  arose 
under  certain  tax  laws  of  Pennsylvania.  The  first,  which  is  re- 
ported under  the  title  of  Case  of  the  State  Freight  Tax,  15  Wall. 
232,  was  that  of  the  Reading  Railroad  Company 

The  court  in  its  opinion  took  notice  of  the  fact  that  the  law  was 
general  in  its  terms,  making  no  •  distinction  between  freight  trans- 
ported wholly  within  the  state  and  that  which  was  destined  to,  or 
came  from  another  state.  But  it  was  held  that  this  made  no  differ- 
ence. The  law  might  be  valid  as  to  one  class,  and  unconstitutional 
as  to  the  other 

If  this  case  stood  alone,  we  should  have  no  hesitation  in  saying 
that  it  would  entirely  govern  the  one  before  us;  for,  as  before  said, 
a  tax  upon  fares  and  freights  received  for  transportation  is  virtually 
a  tax  upon  the  transportation  itself.  But  at  the  same  time  that  the 
Case  of  State  Freight  Tax  was  decided,  the  other  case  referred  to, 
namely,  that  of  State  Tax  on  Railway  Gross  Receipts,  was  also  de- 
cided, and  the  opinion  was  delivered  by  the  same  member  of  the 
court.  15  Wall.  284.  This  was  also  a  case  of  a  tax  imposed  upon 

the  Reading  Railroad  Company These  receipts  were 

derived  partly  from  the  freight  of  goods  transported  wholly  within 
the  state,  and  partly  from  the  freight  of  goods  exported  to  points 
without  the  state,  which  latter  were  discriminated  from  the  former 
in  the  reports  made  by  the  company.  It  was  the  tax  on  the  latter 
receipts  which  formed  the  subject  of  controversy.  The  same  line  of 
argument  was  taken  at  the  bar  as  in  the  other  case.  This  court, 
however,  held  the  tax  to  be  constitutional.  The  grounds  on  which 
the  opinion  was  based  in  order  to  distinguish  this  case  from  the  pre- 
ceding one,  were  two:  first,  that  the  tax,  being  collectible  only 
once  in  six  months,  was  laid  upon  a  fund  which  had  become  the 
property  of  the  company,  mingled  with  its  other  property,  and  in- 
corporated into  the  general  mass  of  its  property,  possibly  expended 
in  improvements,  or  otherwise  invested.  The  case  is  likened,  in  the 
opinion,  to  that  of  taxing  goods  which  have  been  imported,  after 
their  original  packages  have  been  broken,  and  after  they  have  been 


STEAMSHIP  CO.  V.  PENNSYLVANIA.  129 

mixed  with  the  mass  of  property  in  the  country,  which,  it  was  said, 
are  conceded  in  Brown  v.  Maryland  to  be  taxable. 

A  review  of  the  question  convinces  us  that  the  first  ground  on 
which  the  decision  in  State  Tax  on  Railway  Gross  Receipts  was 
placed  is  not  tenable;  that  it  is  not  supported  by  anything  decided 
in  Brown  v.  Maryland;  but,  on  the  contrary,  that  the  reasoning  in 
that  case  is  decidedly  against  it. 

The  second  ground  on  which  the  decision  referred  to  was  based 
was,  that  the  tax  was  upon  the  franchise  of  the  corporation  granted 
to  it  by  the  state.  We  do  not  think  that  this  can  be  affirmed  in 
the  present  case.  It  certainly  could  not  have  been  intended  as  a 
tax  on  the  corporate  franchise,  because,  by  the  terms  of  the  act, 
it  was  laid  equally  on  the  corporations  of  other  states  doing  busi- 
ness in  Pennsylvania.  If  intended  as  a  tax  on  the  franchise  of 
doing  business, — which  in  this  case  is  the  business  of  transportation 
in  carrying  on  interstate  and  foreign  commerce, — it  would  clearly  be 
unconstitutional. 

V  s 

The  corporate  franchises,  the  property,  the  business,  the  income 
of  corporations  created  by  a  state  may  undoubtedly  be  taxed  by  the 
state;  but  in  imposing  such  taxes  care  should  be  taken  not  to  inter- 
fere with  or  hamper,  directly  or  by  indirection,  interstate  or  foreign 
commerce,  or  any  other  matter  exclusively  within  the  jurisdiction  of 
the  Federal  government.  This  is  a  principle  so  often  announced  by 
the  courts,  and  especially  by  this  court,  that  it  may  be  received  as 
an  axiom  of  our  constitutional  jurisprudence.  It  is  unnecessary, 
therefore,  to  review  the  long  list  of  cases  in  which  the  subject  is 
discussed.  Those  referred  to  are  abundantly  sufficient  for  our  pur- 
poses. We  may  add,  however,  that  since  the  decision  of  the  Rail- 
way Tax  Cases  now  reviewed,  a  series  of  cases  has  received  the  con- 
sideration of  this  court,  the  decisions  of  which  are  in  general  har- 
mony with  the  views  here  expressed,  and  show  the  extent  and  limi- 
tations of  the  rule  that  a  state  cannot  regulate  or  tax  the  opera- 
tions or  objects  of  interstate  or  foreign  commerce 

Our  conclusion  is,  that  the  imposition  of  the  tax  in  question  in 
this  cause  was  a  regulation  of  interstate  and  foreign  commerce,  in 
conflict  with  the  exclusive  powers  of  Congress  under  the  Constitu- 
tion. 

The  judgment  of  the  Supreme  Court  of  Pennsylvania  is,  there- 
fore, reversed,  and  the  case  is  remanded  to  be  disposed  of  accord- 
ing to  law,  in  conformity  with  this  opinion. 


130  LIMITATIONS  OF  THE  TAXING  POWER. 


RATTERMAN  V.  WESTERN  UNION  TELEGRAPH   CO. 

Supreme  Court  of  the  United  States.    May,  1888. 
121  United  States,  411. 

Mr.  Justice  MILLER,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

With  regard  to  the  question  which  is  certified  to  us  as  dividing 
the  opinions  of  the  judges  of  the  Circuit  Court,  we  do  not  think 
that  there  is  any  difficulty,  and  can  hardly  see  how  it  arose  in  the 
present  case.  The  question  is  "whether  a  single  tax,  assessed  under 
the  Revised  Statutes  of  Ohio,  §  2778,  upon  the  receipts  of  a  tele- 
graph company,  which  receipts  were  derived  partly  from  interstate 
commerce  and  partly  from  commerce  within  the  State,  but  which 
were  returned  and  assessed  in  gross  and  without  separation  or  ap- 
portionment, is  wholly  invalid,  or  invalid  only  in  the  proportion 
and  to  the  extent  that  said  receipts  were  derived  from  interstate 
commerce/' 

We  do  not  think  this  particular  question  is  material  in  this  casq. 
because  the  state  of  facts*  agreed  upon  between  the  parties  makes 
this  separation  and  presents  the  matter  to  the  court,  freed  from  the 
point  raised  by  the  question  that  the  tax  was  not  separable.  Nor 
do  we  believe,  if  there  were  allegations  either  in  the  bill  or  answer 
setting  up  that  part  of  the  tax  was  from  interstate  commerce  and 
part  from  commerce  wholly  within  the  State,  that  there  would  have 
been  any  difficulty  in  securing  the  evidence  of  the  amount  of  re- 
ceipts chargeable  to  these  separate  classes  of  telegrams,  by  means  of 
the  appointment  of  a  referee  or  master  to  inquire  into  that  fact 
and  make  report  to  the  court.  Neither  are  we  of  opinion  that  them 
is  any  real  question,  under  the  decisions  of  this  court,  in  regard  to 
holding  that,  so  far  as  this  tax  was  levied  upon  receipts  properly 
appurtenant  to  interstate  commerce,  it  was  void,  and  that  so  far  as 
it  was  only  upon  commerce  wholly  within  the  State  it  was  valid. 

In  Pensacola  Telegraph  Co.  v.  Western  Union  Telegraph  Com- 
pany, 96  U.  S.,  1,  it  was  decided  by  this  court  that  the  telegraph 
was  an  instrument  of  commerce;  that  telegraph  companies  were 
subject  to  the  regulating  power  of  Congress  in  respect  to  their  for- 
eign and  interstate  business,  and  that  such  a  company  occupies  the 

*The  statement  of  facts  shows  that  the  Western  Union  Telegraph  Com- 
pany was  incorporated  under  the  laws  of  New  York. 


RATTERMAN  V.  W.  U.  TEL.  CO.  131 

same  relation  to  commerce,  as  a  carrier  of  messages,  that  a  rail- 
road company  does  as  a  carrier  of  goods. 

In  Telegraph  Company  v.  Texas,  105  U.  S.,  460,  the  same  ques- 
tion presented  in  this  case  was  before  the  court,  that  of  the  power 
of  the  State  to  tax  telegraphic  messages  received  and  delivered  by 
the  same  corporation  which  is  now  before  us.  In  that  case  no  dis- 
tinction was  made  by  the  statute  between  what  we  now  call  inter- 
state messages  and  those  exclusively  within  the  State.  This  court, 
therefore,  in  reviewing  the  decision  of  the  Supreme  Court  of  the 
State  of  Texas,  which  had  allowed  no  deduction  for  taxes  on  mes- 
sages sent  out  of  the  State,  or  by  government  officers  on  government 
business,  said:  "It  follows  that  the  judgment,  so  far  as  it  includes 
the  tax  on  messages  sent  out  of  the  State,  or  for  the  government 
on  public  business,  is  erroneous.  The  rule  that  the  regulation  of 
commerce  which  is  confined  exclusively  within  the  jurisdiction  and 
territory  of  a  State,  and  does  not  affect  other  nations,  or  States,  or 
the  Indian  tribes — that  is  to  say,  the  purely  internal  commerce  of  a 
State,  belongs  exclusively  to  the  State,  is  as  well  settled  as  that  the 
regulation  of  commerce  which  does  affect  other  nations  or  States  or 
the  Indian  tribes  belongs  to  Congress.  Any  tax,  therefore,  which 
the  State  may  put  on  messages  sent  by  private  parties,  and  not  by 
the  agents  of  the  government  of  the  United  States,  from  one  place 
to  another,  exclusively  within  its  own  jurisdiction,  will  not  be  re- 
pugnant to  the  Constitution  of  the  United  States.  Whether  the 
law  of  Texas,  in  its  present  form,  can  be  used  to  enforce  the  col- 
lection of  such  a  tax  is  a  question  entirely  within  the  jurisdiction 
of  the  courts  of  the  State,  and  as  to  which  we  have  no  power  of 
review." 

The  court  reversed  the  judgment  of  the  Supreme  Court  of 
Texas,  and  remanded  the  cases  with  instructions  for  such  further 
proceedings  as  justice  might  require.  Evidently,  the  purpose  of 
this  was  to  permit  the  Supreme  Court  of  that  State,  if  it  could  sep- 
arate the  taxes  upon  the  two  classes  of  telegrams,  to  do  so,  and 
render  judgment  accordingly. 

In  the  recent  case  of  The  Western  Union  Telegraph  Company  v. 
The  Attorney  General  of  the  Commonwealth  of  Massachusetts,  125 
U.  S.,  530,  decided  at  this  term,  a  tax  was  levied  upon  that  cor- 
poration, apportioned  under  the  laws  of  Massachusetts  upon  the  tax- 
able value  of  its  capital  stock.  The  ratio  which  should  have  been 
allotted  to  that  commonwealth  may  be  supposed  to  have  been  prop- 
erly apportioned  to  it,  ascertaining  that  portion  by  means  of  the 
length  of  the  lines  of  the  company  in  relation  to  the  entire  mileage 


132  LIMITATIONS  OF  THE  TAXING  POWER. 

of  its  lines  in  the  United  States.  The  payment  of  the  tax  was  re- 
sisted, however,  partly  upon  the  ground  that  it  was  levied  upon 
interstate  commerce,  but  mainly  because  it  was  asserted  to  be  a 
violation  of  the  rights  conferred  on  the  company  by  the  act  of 
July  24,  1866,  now  Title  LXV.,  §§  5263  to  5269,  of  the  Eevised 
Statutes.  It  was  alleged  that  the  defendant  company,  having  ac- 
cepted the  provisions  of  that  law,  was  entirely  exempt  from  taxation 
by  the  State.  This  court,  however,  held  that  this  exemption  only 
extended  under  that  Taw  to  so  much  of  the  lines  of  the  telegraph 
company  as  were,  in  the  language  of  §  5263,  "through  and  over 
any  portion  of  the  public  domain  of  the  United  States,  over  and 
along  any  of  the  military  or  post  roads  of  the  United  States,  which 
have  been  or  may  hereafter  be  declared  such  by  law,  and  over,  un- 
der, or  across  the  navigable  streams  or  waters  of  the  United  States." 

It  was  shown  in  that  case  that,  of  the  2833.05  miles  of  the  lines 
of  the  defendant  corporation  within  the  boundaries  of  Massachu- 
setts, more  than  2334.55  miles  came  within  the  terms  of  that  sec- 
tion, being  over  or  along  post  roads,  made  such  by  the  United 
States,  or  over,  under,  or  across  its  navigable  streams  or  waters,  leav- 
ing only  498.50  miles  not  within  such  description,  on  which  the 
company  offered  to  pay  the  proportion  of  the  tax  assessed  against 
it  according  to  mileage  by  the  State  authorities. 

We  refer  to  this  now  only  for  the  purpose  of  showing  how  easily 
the  subject  of  taxation  which  is  forbidden  by  the  Constitution  may 
be  separated  from  that  which  is  permissible  in  this  class  of  cases. 
The  court  held  in  that  case  that  this  tax,  being  in  effect  levied  upon 
the  capital  stock  or  property  of  the  company  in  the  State  of  Massa- 
chusetts, which  was  ascertained  upon  the  basis  of  the  proportion 
which  the  length  of  its  lines  in  that  State  bore  to  their  entire  length 
throughout  the  whole  country,  and  not  upon  its  messages  or  upon 
the  receipts  for  such  messages,  was  a  valid  tax. 

Under  these  views,  we  answer  the  question,  in  regard  to  which 
the  judges  of  the  Circuit  Court  divided  in  opinion,  by  saying  that  a 
single  tax,  assessed  under  the  Revised  Statutes  of  Ohio,  upon  the 
receipts  of  a  telegraph  company  which  were  derived  partly  from  in- 
terstate commerce  and  partly  from  commerce  within  the  State,  but 
which  were  returned  and  assessed  in  gross  and  without  separation 
or  apportionment,  is  not  wholly  invalid,  but  is  invalid  only  in  pro- 
portion to  the  extent  that  such  receipts  were  derived  from  interstate 
commerce.  Concurring,  therefore,  with  the  circuit  judge  in  his 
action,  enjoining  the  collection  of  the  taxes  on  that  portion  of  the 


BROWN  V.  MARYLAND.  133 

receipts  derived  from  interstate  commerce,  and  permitting  the  treas- 
urer to  collect  the  other  tax  upon  property  of  the  company  and 
upon  receipts  derived  from  commerce  entirely  within  the  limits  of 
the  State,  this  decree  is  Affirmed. 


2.     State  Taxation  of  Imports. 
BROWN  V.  STATE  OF  MARYLAND. 

Supreme  Court  of  the  United  States.     March,  1827. 
12  Wheaton,  419. 

Mr.  Chief  Justice  MARSHALL  delivered  the  opinion  of  the  court. 

This  is  a  writ  of  error  to  a  judgment  rendered  in  the  Court  of 
Appeals  of  Maryland,  affirming  a  judgment  of  the  City  Court  of 
Baltimore,  on  an  indictment  found  in  that-  Court  against  the  plain- 
tiffs in  error,  for  violating  an  act  of  the  legislature  of  Maryland. 
The  indictment  was  founded  on  the  second  section  of  that  act, 
which  is  in  these  words:  "And  be  it  enacted,  that  all  importers  of 
foreign  articles  or  commodities,  of  dry  goods,  wares,  or  merchan- 
dise, by  bale  or  package,  or  of  wine,  rum,  brandy,  whiskey  and" 
other  distilled  spirituous  liquors,  etc.,  and  other  persons  selling  the 
same  by  wholesale,  bale  or  package,  hogshead,  barrel,  or  tierce,  shall, 
before  they  are  authorized  to  sell,  take  out  a  license,  as  by  the  orig- 
inal act  is  directed,  for  which  they  shall  pay  fifty  dollars;  and  in 
case  of  neglect  or  refusal  to  take  out  such  license,  shall  be  subject 
to  the  same  penalties  and  forfeitures  as  are  prescribed  by  the  orig- 
inal act  to  which  this  is  a  supplement."  The  indictment  charges 
the  plaintiffs  in  error  with  having  imported  and  sold  one  package 
of  foreign  dry  goods  without  having  license  to  do  so.  A  judgment 
was  rendered  against  them  on  demurrer  for  the  penalty  which  the 
act  prescribes  for  the  offence;  and  that  judgment  is  now  before 
this  Court. 

The  cause  depends  entirely  on  the  question,  whether  the  legisla- 
ture of  a  State  can  constitutionally  require  the  importer  of  foreign 
articles  to  take  out  a  license  from  the  State,  before  he  shall  be  per- 
mitted to  sell  a  bale  or  package  so  imported. 

It  has  been  truly  said,  that  the  presumption  is  in  favor  of  every 
legislative  act,  and  that  the  whole  burthen  of  proof  lies  on  him 
who  denies  its  constitutionality.  The  plaintiffs  in  error  take  the 
burthen  upon  themselves,  and  insist  that  the  act  under  consideration 


134  LIMITATIONS  OF  THE  TAXING  POWER, 

is  repugnant  to  two  provisions  in  the  Constitution  of  the  United 
States. 

1.  To  that  which  declares  that  "no  State  shall,  without  the  con- 
sent of  Congress,  lay  any  imposts,  or  duties  on  imports  or  exports, 
except  what  may  be  absolutely  necessary  for  executing  its  inspection 
laws." 

2.  To  that  which  declares  that  Congress  shall  have  power  "to 
regulate  commerce  with  foreign    nations,    and    among    the    several 
States,  and  with  the  Indian  tribes." 

1.  The  first  inquiry  is  into  the  extent  of  the  prohibition  upon 
States  "to  lay  any  imposts  or  duties  on  imports  or  exports."  The 
counsel  for  the  State  of  Maryland  would  confine  this  prohibition  to 
laws  imposing  duties  on  the  act  of  importation  or  exportation.  The 
counsel  for  the  plaintiffs  in  error  give  them  a  much  wider  scope. 

What,  then,  is  the  meaning  of  the  words,  "imposts,  or  duties  on 
imports  or  exports?" 

An  impost,  or  duty  on  imports,  is  a  custom  or  tax  levied  on  articles 
brought  into  a  country,  and  is  most  usually  secured  before  the  im- 
porter is  allowed  to  exercise  his  rights  of  ownership  over  them,  be- 
cause evasions  of  the  law  can  be  prevented  more  certainly  by  ex- 
ecuting it  while  the  articles  are  in  its  custody.  It  would  not,  how- 
ever, be  less  an  impost  or  duty  on  the  articles,  if  it  were  to  be  levied 
on  them  after  they  were  landed.  The  policy  and  consequent  prac- 
tice of  levying  or  securing  the  duty  before,  or  on  entering  the  port, 
does  not  limit  the  power  to  that  state  of  things,  nor,  consequently, 
the  prohibition,  unless  the  true  meaning  of  the  clause  so  confines 
it.  What,  then,  are  "imports?"  The  lexicons  inform  us,  they  are 
"things  imported."  If  we  appeal  to  usage  for  the  meaning  of  the 
word,  we  shall  receive  the  same  answer.  They  are  the  articles  them- 
selves which  are  brought  into  the  country.  "A  duty  on  imports," 
then,  is  not  merely  a  duty  on  the  act  of  importation,  but  is  a  duty 
on  the  thing  imported.  It  is  not,  taken  in  its  literal  sense,  con- 
fined to  a  duty  levied  while  the  article  is  entering  the  country,  but 
extends  to  a  duty  levied  after  the  article  has  entered  the  country. 
The  succeeding  words  of  the  sentence  which  limit  the  prohibition, 
show  the  extent  in  which  it  was  understood.  The  limitation  is, 
"except  what  may  be  absolutely  necessary  for  executing  its  inspec- 
tion laws."  Now,  the  inspection  laws,  so  far  as  they  act  upon  arti- 
cles for  exportation,  are  generally  executed  on  land,  before  the  arti- 
cle is  put  on  board  the  vessel;  so  far  as  they  act  on  importations, 
they  are  generally  executed  on  articles  which  are  landed.  The  tax 


BROWN  V.  MARYLAND.  135 

or  duty  of  inspection,  then,  is  a  tax  which  is  frequently,  if  not 
always  paid  for  service  performed  on  land,  while  the  article  is  in  the 
bosom  of  the  country.  Yet  this  tax  is  an  exception  to  the  prohibi- 
tion on  the  States  to  lay  duties  on  imports  or  exports.  The  excep- 
tion was  made  because  the  tax  would  otherwise  have  been  within  the 
prohibition. 

If  it  be  a  rule  of  interpretation  to  which  all  assent,  that  the  ex- 
ception of  a  particular  thing  from  general  words,  proves  that,  in  the 
opinion  of  the  lawgiver,  the  thing  excepted  would  be  within  the  gen- 
eral clause  had  the  exception  not  been  made,  we  know  no  reason 
why  this  general  rule  ehould  not  be  as  applicable  to  the  Constitution 
as  to  other  instruments.  If  it  be  applicable,  then  this  exception  in 
favour  of  duties  for  the  support  of  the  inspection  laws,  goes  far  in 
proving  that  the  framers  of  the  Constitution  classed  taxes  of  a  sim- 
ilar character  with  those  imposed  for  the  purposes  of  inspection, 
\vith  duties  on  imports  and  exports,  and  supposed  them  to  be  pro- 
hibited. 

If  we  quit  this  narrow  view  of  the  subject,  and  passing  from  the 
literal  interpretation  of  the  words,  look  to  the  objects  of  the  pro- 
hibition, we  find  no  reason  for  withdrawing  the  act  under  considera- 
tion from  its  operation. 

From  the  vast  inequality  between  the  different  States  of  the  con- 
federacy, as  to  commercial  advantages,  few  subjects  were  viewed 
with  greater  interest,  or  excited  more  irritation,  than  the  manner 
in  which  the  several  States  exercised,  or  seemed  disposed  to  exercise, 
the  power  of  laying  duties  on  imports.  From  motives  which  were 
deemed  sufficient  by  the  statesmen  of  that  day,  the  general  power  of 
taxation,  indispensably  necessary  as  it  was,  and  jealous  as  the  States 
were  of  any  encroachment  on  it,  was  so  far  abridged  as  to  forbid 
them  to  touch  imports  or  exports,  with  the  single  exception  which 
has  been  noted.  Why  are  they  restrained  from  imposing  these 
duties?  Plainly,  because,  in  the  general  opinion,  the  interest  of  all 
would  be  best  promoted  by  placing  that  whole  subject  under  the 
control  of  Congress.  Whether  the  prohibition  to  "lay  imposts,  or 
duties  on  imports  or  exports,"  proceeded  from  the  apprehension  that 
the  power  might  be  so  exercised  as  to  disturb  that  equality  among 
the  States  which  was  generally  advantageous,  or  that  harmony  be- 
tween them  which  it  was  desirable  to  preserve,  or  to  maintain  un- 
impaired our  commercial  connexions  with  foreign  nations,  or  to  con- 
fer this  source  of  revenue  on  the  government  of  the  Union,  or 
whatever  other  motive  might  have  induced  the  prohibition,  it  is 
plain,  that  the  object  would  be  as  completely  defeated  by  a  power  to 


136  LIMITATIONS  OF  THE  TAXING  POWER. 

tax  the  article  in  the  hands  of  the  importer  the  instant  it  was 
landed,  as  by  a  power  to  tax  it  while  entering  the  port.  There  is 
no  difference,  in  effect,  between  the  power  to  prohibit  the  sale  of  an 
article,  and  a  power  to  prohibit  its  introduction  into  the  country. 
The  one  would  be  a  necessary  consequence  of  the  other.  No  goods 
would  be  imported  if  none  could  be  sold.  No  object  of  any  descrip- 
tion can  be  accomplished  by  laying  a  duty  on  importation,  which 
may  not  be  accomplished  with  equal  certainty  by  laying  a  duty  on 
the  thing  imported  in  the  hands  of  the  importer.  It  is  obvious,  that 
the  same  power  which  imposes  a  light  duty,  can  impose  a  very  heavy 
one,  one  which  amounts  to  a  prohibition.  Questions  of  power  do  not 
depend  on  the  degree  to  which  it  may  be  exercised.  If  it  may  be 
exercised  at  all,  it  must  be  exercised  at  the  will  of  those  in  whose 
hands  it  is  placed.  If  the  tax  may  be  levied  in  this  form  by  a 
State,  it  may  be  levied  to  an  extent  which  will  defeat  the  revenue 
by,  impost,  so  far  as  it  is  drawn  from  importations  into  the  par- 
ticular State.  We  are  told,  that  such  wild  and  irrational  abuse  of 
power  is  not  to  be  apprehended,  and  is  not  to  be  taken  into  view 
when  discussing  its  existence.  All  power  may  be  abused;  and  if 
the  fear  of  its  abuse  is  to  constitute  an  argument  against  its  exist- 
ence, it  might  be  urged  against  the  existence  of  that  which  is  uni- 
versally acknowledged,  and  which  is  indispensable  to  the  general 
safety.  The  States  will  never  be  so  mad  as  to  destroy  their  own 
commerce,  or  even  to  lessen  it. 

We  do  not  dissent  from  these  general  propositions.  We  do  not 
suppose  any  State  would  act  so  unwisely.  But  we  do  not  place  the 
question  on  that  ground. 

These  arguments  apply  with  precisely  the  same  force  against  the 
whole  prohibition.  It  might,  with  the  same  reason  be  said,  that  no 
State  would  be  so  blind  to  its  own  interests  as  to  lay  duties  on  im- 
portations which  would  either  prohibit  or  diminish  its  trade.  Yet 
the  framers  of  our  Constitution  have  thought  this  a  power  which 
no  State  ought  to  exercise.  Conceding,  to  the  full  extent  which  is 
required,  that  every  State  would,  in  its  legislation  on  this  subject, 
provide  judiciously  for  its  own  interests,  it  cannot  be  conceded,  that 
each  would  respect  the  interest  of  others.  A  duty  on  imports  is  a 
tax  on  the  article  which  is  paid  by  the  consumer.  The  great  import- 
ing States  would  thus  levy  a  tax  on  the  non-importing  States,  which 
would  not  be  less  a  tax  because  their  interest  would  afford  ample 
security  against  its  ever  being  so  heavy  as  to  expel  commerce  from 
their  ports.  This  would  necessarily  produce  countervailing  measures 
on  the  part  of  those  States  whose  situation  was  less  favourable  to 


BROWN  V.  MARYLAND.  137 

importation.  For  this,  among  other  reasons,  the  whole  power  of 
laying  duties  on  imports  was,  with  a  single  and  slight  exception, 
taken  from  the  States.  When  we  are  inquiring  whether  a  particular 
act  is  within  this  prohibition,  the  question  is  not.  whether  the  State 
may  so  legislate  as  to  hurt  itself,  but  whether  the  act  is  within  the 
words  and  mischief  of  the  prohibitory  clause.  It  has  already  been 
shown,  that  a  tax  on  the  article  in  the  hands  of  the  importer,  is 
within  its  words;  and  we  think  it  too  clear  for  controversy,  that 
the  same  tax  is  within'  its  mischief.  We  think  it  unquestionable, 
that  such  a  tax  has  precisely  the  same  tendency  to  enhance  the  price 
of  the  article,  as  if  imposed  upon  it  while  entering  the  port. 

The  counsel  for  the  State  of  Maryland  insist,  with  great  reason, 
that  if  the  words  of  the  prohibition  be  taken  in  their  utmost  lati- 
tude, they  will  abridge  the  power  of  taxation,  which  all  admit  to  be 
essential  to  the  States,  to  an  extent  which  has  never  yet  been  sus- 
pected, and  will  deprive  them  of  resources  which  are  necessary  to 
supply  revenue,  and  which  they  have  heretofore  been  admitted  to 
possess.  These  words  must  therefore  be  construed  with  some  limita- 
tion; and,  if  this  be  admitted,  they  insist,  that  entering  the  coun- 
try is  the  point  of  time  when  the  prohibition  ceases,  and  the  power 
of  the  State  to  tax  commences. 

It  may  be  conceded,  that  the  words  of  the  prohibition  ought  not 
to  be  pressed  to  their  utmost  extent;  that  in  our  complex  system, 
the  object  of  the  powers  conferred  on  the  government  of  the  Union, 
and  the  nature  of  the  often  conflicting  powers  which  remain  in  the 
States,  must  always  be  taken  into  view,  and  may  aid  in  expounding 
the  words  of  any  particular  clause.  But,  while  we  admit  that 
sound  principles  of  construction  ought  to  restrain  all  Courts  from 
carrying  the  words  of  the  prohibition  beyond  the  object  the  Consti- 
tution is  intended  to  secure;  that  there  must  be  a  point  of  time 
when  the  prohibition  ceases,  and  the  power  of  the  State  to  tax  com- 
mences; we  cannot  admit  that  this  point  of  time  is  the  instant 
the  articles  enter  the  country.  It  is,  we  think,  obvious,  that  this 
construction  would  defeat  the  prohibition. 

The  constitutional  prohibition  on  the  States  to  lay  a  duty  on  im- 
ports, a  prohibition  which  a  vast  majority  of  them  must  feel  an 
interest  in  preserving,  may  certainly  come  in  conflict  with  their 
acknowledged  power  to  tax  persons  and  property  within  their  ter- 
ritory. The  power,  and  the  restriction  on  it,  though  quite  distin- 
guishable when  they  do  not  approach  each  other,  may  yet,  like  the 
intervening  colours  between  white  and  black,  approach  ?o  nearly  as 
to  perplex  the  understanding,  as  colours  perplex  the  vision  in  mark- 


138  LIMITATIONS  OF  THE  TAXING  POWER. 

ing  the  distinction  between  them.  Yet  the  distinction  exists,  and 
must  be  marked  as  the  cases  arise.  Till  they  do  arise,  it  might  bo 
premature  to  state  any  rule  as  being  universal  in  its  application. 
It  is  sufficient  for  the  present  to  say,  generally,  that  when  the  im- 
porter has  so  acted  upon  the  thing  imported,  that  it  has  luvonie  in- 
corporated and  mixed  up  with  the  mass  of  property  in  the  coun- 
try, it  has,  perhaps,  lost  its  distinctive  character  as  an  import,  and 
has  become  subject  to  the  taxing  power  of  the  State;  but  while  re- 
maining the  property  of  the  importer,  in  his  warehouse,  in  the  orig- 
inal form  or  package  in  which  it  was  imported,  a  tax  upon  it  is  too 
plainly  a  duty  on  imports  to  escape  the  prohibition  in  the  Consti- 
tution. 

The  counsel  for  the  plaintiffs  in  error  contend,  that  the  importer 
purchases,  by  payment  of  the  duty  to  the  United  States,  a  right  to 
dispose  of  his  merchandise,  as  well  as  to  bring  it  into  the  country 
and  certainly  the  argument  is  supported  by  strong  reason,  as  well 
as  by  the  practice  of  nations,  including  our  own.  The  object  of 
importation  is  sale;  it  constitutes  the  motive  for  paying  the  duties; 
and  if  the  United  States  possess  the  power  of  conferring  the  right 
to  sell,  as  the  consideration  for  which  the  duty  is  paid,  every  prin- 
ciple of  fair  dealing  requires  that  they  should  be  understood  to 
confer  it.  The  practice  of  the  most  commercial  nations  conforms  to 
this  idea.  Duties,  according  to  that  practice,  are  charged  on  those 
articles  only  which  are  intended  for  sale  or  consumption  in  the 
country.  Thus,  sea  stores,  goods  imported  and  re-exported  on  the 
same  vessel,  goods  landed  and  carried  over  land  for  the  purpose  of 
being  re-exported  from  some  other  port,  goods  forced  in  by  stress 
of  weather,  and  landed,  but  not  for  sale,  are  exempted  from  the 
payment  of  duties.  The  whole  course  of  legislation  on  the  subject 
shows,  that,  in  the  opinion  of  the  legislature,  the  right  to  sell  is 
connected  with  the  payment  of  duties. 

The  counsel  for  the  defendant  in  error  have  endeavoured  to  illus- 
trate their  proposition,  that  the  constitutional  prohibition  ceases  the 
instant  the  goods  enter  the  country,  by  an  array  of  the  conse- 
quences which  they  suppose  must  follow  the  denial  of  it.  If  the 
importer  acquires  the  right  to  sell  by  the  payment  of  duties,  he 
may,  they  say,  exert  that  right  when,  where,  and  as  he  pleases,  and 
the  State  cannot  regulate  it.  He  may  sell  by  retail,  at  auction,  or 
as  an  itinerant  pedlar.  He  may  introduce  articles,  as  gunpowder, 
which  endanger  a  city,  into  the  midst  of  its  population;  he  may  in- 
troduce articles  which  endanger  the  public  health,  and  the  power  of 
self-preservation  is  denied.  An  importer  may  bring  in  goods,  as 


BROWN  v.  MANY:  \\  139 

plate,  for  his  own  use,  and  thus  retain  wueh  valuable  property     \ 
euipt  from  taxation. 

These  objections  to  the  principle,  if  well  founded,  would  eerUiuh 
be  entitled  to  serious  consideration.  But,  we  think,  they  will  Ue 
found,  on  examination,  not  to  belong  necessarily  to  the  principle. 
and.  consequently,  not  to  prove*  that  it  may  not  be  resortvd  to  with 
safety  as  a  criterion  by  which  to  measure  the  extent  of  the  prohibi- 
tion. 

This  indictment  is  against  the  importer,  for  selling  a  package  of 
dry  goods  in  the  form  in  which  it  was  imported,  without  a  license 
This  state  of  things  is  changed  if  he  sells  them,  or  ot: 
them  with  the  general  property  of  the  State,  by  breaking  up  In- 
packages,  and  travelling  with  them  as  an  UUUM-.-UH  pedlar.  In  the 
first  case,  the  tax  intercepts  the  import,  as  an  import,  in  its  way 
to  become  incorporated  with  the  general  mass  of  property,  and  de 
nics  it  the  privilege  of  becoming  so  incorporated  until  it  shall  luv 
contributed  to  the  revenue  of  the  State.  It  denies  ID  the  import,  i 
the  right  of  using  the  privilege  which  he  has  purchased  from  the 
I'nited  States,  until  he  shall  have  also  purchased  it  from  the  Shu, 
In  the  last  eases,  the  tax  I'm  da  the  article  alrc.id\  m.orporaled  \\ith 
the  mass  of  property  hy  the  act  of  the  importer.  He  has  used  the 
privilege  he  had  purchased,  and  has  himself  mixed  them  up  \viih  the 
eommon  mass,  and  the  law  may  treat  them  &*  it  finds  them.  The 
same  observations  apply  to  plate,  or  other  furniture  used  l.\  ihe 
importer. 

So,  if  he  sells  by  auction.  Auctioneers  are  persons  licensed  by  Uio 
State,  and  if  the  importer  chooses  to  empln\.  them,  he  ..-in  us  Mil. 
object  to  paying  for  this  service,  as  for  any  other  for  \\hi.h  he  nmv 
apply  to  an  officer  of  the  State.  The  right  of  sale  may  he  very  well 
annexed  to  importation,  without  annexing  to  it,  also,  the  privilege  of 
using  the  officers  licensed  by  the  State  to  make  sides  in  n  peenlinr 
way. 

The  power  to  direct  the  removal  of  gunpowder  is  a   lu:mrli  (.f  Ihr 
police   power,    which    unquest.ionalily    remains,    and    ought,    to    remain. 
within  the  States.     If  the  possessor  stores  it   himself  out  of  town,  the 
removal  cannot  be  a  duty  on  import.,,  bee;iiiKc  it.  eontnlmles  IK. thing 
to  the  revenue.      If  he  prefers  placing  it   in  a  public  maga/.ine,  it  in 
because  he  stores   it,  there,   in   his  own   opinion,   more  iidvanl.i,"<  "n  !•, 
than  elsewhere.     We  are  not  sure  that,  this  may  not.  he  elnnsed  >nn 
inspection    !;;ws.      Tlu-    removal    or   destruction    of    in  feel  ion::   or    un 
sound  articles  is,  undoubtedly,  an  exercise  of  that,  power,  and   forniH 
an  express  exception  to  the  prohibition  we  are  considering      Indm-d, 


140  LIMITATIONS  OF  THE  TAXING  TOWER. 

the  laws  of  the  United  States  expressly  sanction  the  health  laws  of 
a  State. 

The  principle,  then,  for  which  the  plaintiffs  in  error  contend  that 
the  importer  acquires  a  right,  not  only  to  bring  the  articles  into  the 
country,  but  to  mix  them  with  the  common  mass  of  property,  does 
not  interfere  with  the  necessary  power  of  taxation  which  is  acknowl- 
edged to  reside  in  the  States,  to  that  dangerous  extent  which  the 
counsel  for  the  defendants  in  error  seem  to  apprehend.  It  carries 
the  prohibition  in  the  Constitution  no  farther  than  to  prevent  the 
States  from  doing  that  which  it  was  the  great  object  of  the  Consti- 
tution to  prevent. 

But,  if  it  should  be  proved,  that  a  duty  on  the  article  itself  would 
be  repugnant  to  the  Constitution,  it  is  still  argued,  that  this  is  not 
a  tax  upon  the  article,  but  on  the  person.  The  State,  it  is  said,  may 
tax  occupations,  and  this  is  nothing  more. 

It  is  impossible  to  conceal  from  ourselves,  that  this  is  varying  the 
form,  without  varying  the  substance.  It  is  treating  a  prohibition 
which  is  general,  as  if  it  were  confined  to  a  particular  mode  of  doing 
the  forbidden  thing.  All  must  perceive,  that  a  tax  on  the  sale  of  an 
article,  imported  only  for  sale,  is  a  tax  on  the  article  itself.  It  is 
true,  the  State  may  tax  occupations  generally,  but  this  tax  must  be 
paid  by  those  who  employ  the  individual,  or  is  a  tax  on  his  business. 
The  lawyer,  the  physician,  or  the  mechanic,  must  either  charge  more 
on  the  article  in  which  he  deals,  or  the  thing  itself  is  taxed  through 
his  person.  This  the  State  has  a  right  to  do,  because  no  constitu- 
tional prohibition  extends  to  it.  So,  a  tax  on  the  occupation  of  an 
importer  is,  in  like  manner,  a  tax  on  importation.  It  must  add  to 
the  price  of  the  article,  and  be  paid  by  the  consumer,  or  by  the  im- 
porter himself,  in  like  manner  as  a  direct  duty  on  the  article  itself 
would  be  made.  This  the  State  has  not  a  right  to  do,  because  it  is 
prohibited  by  the  Constitution. 

In  support  of  the  argument,  that  the  prohibition  ceases  the  instant 
the  goods  are  brought  into  the  country,  a  comparison  has  been  drawn 
between  the  opposite  words  export  and  import.  As,  to  export,  it  is 
said,  means  only  to  carry  goods  out  of  the  country;  so,  to  import, 
means  only  to  bring  them  into  it.  But,  suppose  we  extend  this  com- 
parison to  the  two  prohibitions.  The  States  are  forbidden  to  lay  a 
duty  on  exports,  and  the  United  States  are  forbidden  to  lay  a  tax 
or  duty  on  articles  exported  from  any  State.  There  is  some  diver- 
sity in  language,  but  none  is  perceivable  in  the  act  which  is  prohib- 
ited. The  United  States  have  the  same  right  to  tax  occupations 
which  is  possessed  by  the  States.  Now,  suppose  the  United  States 


BROWtf  V.  MARYLAND.  Ui 

should  require  every  exporter  to  take  out  a  license,  for  which 
he  should  pay  such  tax  as  Congress  might  think  proper  to  impose; 
would  government  be  permitted  to  shield  itself  from  the  just  censure 
to  which  this  attempt  to  evade  the  prohibitions  of  the  Constitution 
would  expose  it,  by  saying,  that  this  was  a  tax  on  the  person,  not  on 
the  article,  and  that  the  legislature  had  a  right  to  tax  occupations? 
Or,  suppose  revenue  cutters  were  to  be  stationed  off  the  coast  for  the 
purpose  of  levying  a  duty  OP  all  merchandise  found  in  vessels  which 
were  leaving  the  United  States  for  foreign  countries ;  would  it  be  re- 
ceived as  an  excuse  for  this  outrage,  were  the  government  to  say  that 
exportation  meant  no  more  than  carrying  goods  out  of  the  country, 
and  as  the  prohibition  to  lay  a  tax  on  imports,  or  things  imported, 
ceased  the  instant  they  were  brought  into  the  country,  so  the  pro- 
hibition to  tax  articles  exported  ceased  when  they  were  carried  out  of 
the  country? 

We  think,  then,  that  the  act  under  which  the  plaintiffs  in  error 
were  indicted,  is  repugnant  to  that  article  of  the  Constitution  which 
declares,  that  "no  State  shall  lay  any  imposts  or  duties  on  imports  or 
exports." 

2.  It  is  also  repugnant  to  that  clause  of  the  Constitution  which 
empowers  "Congress  to  regulate  commerce  with  foreign  nations,  and 
among  the  several  States,  and  with  the  Indian  tribes?" 

The  oppressed  and  degraded  state  of  commerce  previous  to  the 
adoption  of  the  Constitution  can  scarcely  be  forgotten.  It  was  regu- 
lated by  foreign  nations  with  a  single  view  to  their  own  interests; 
and  our  disunited  efforts  to  counteract  their  restrictions  were  ren- 
dered impotent  by  want  of  combination.  Congress,  indeed,  possessed 
the  power  of  making  treaties;  but  the  inability  of  the  federal  gov- 
ernment to  enforce  them  had  become  so  apparent  as  to  render  thai 
power  in  a  great  degree  useless.  Those  who  felt  the  injury  arising 
from  this  state  of  things,  and  those  who  were  capable  of  estimating 
the  influence  of  commerce  on  the  prosperity  of  nations,  perceived  the 
necessity  of  giving  the  control  over  this  important  subject  to  a  sin- 
gle government.  It  may  be  doubted  whether  any  of  the  evils  pro- 
ceeding from  the  feebleness  of  the  federal  government,  contributed 
more  to  that  great  revolution  which  introduced  the  present  system, 
than  the  deep  and  general  conviction,  that  commerce  ought  to  be  reg- 
ulated by  Congress.  It  is  not,  therefore,  matter  of  surprise,  that  the 
grant  should  be  as  extensive  as  the  mischief,  and  should  comprehend 
all  foreign  commerce,  and  all  commerce  among  the  States.  To  con- 
strue the  power  so  as  to  impair  its  efficacy,  would  tend  to  defeat  an 
object,  in  the  attainment  of  which  the  American  public  took,  and 


142  LIMITATIONS  OF  THE  TAXING  POWEK. 

justly  took,  that  strong  interest  which  arose  from  a  full  conviction 
of  its  necessity. 

What,  then,  is  the  just  extent  of  a  power  to  regulate  commerce 
with  foreign  nations,  and  among  the  several  States? 

This  question  was  considered  in  the  case  of  Gibbons  v.  Ogden,  (9 
Wheat.  Rep.  1,)  in  which  it  was  declared  to  be  complete  in  itself, 
and  to  acknowledge  no  limitations  other  than  are  prescribed  by  the 
Constitution.  The  power  is  coextensive  with  the  subject  on  which  it 
acts,  and  cannot  be  stopped  at  the  external  boundary  of  a  State,  but 
must  enter  its  interior. 

We  deem  it  unnecessary  now  to  reason  in  support  of  these  propo- 
sitions. Their  truth  is  proved  by  facts  continually  before  our  eyes, 
and  was,  we  think,  demonstrated,  if  they  could  require  demonstra- 
tion, in  the  case  already  mentioned. 

If  this  power  reaches  the  interior  of  a  State,  and  may  be  there 
exercised,  it  must  be  capable  of  authorizing  the  sale  of  those  articles 
which  it  introduces.  Commerce  is  intercourse:  one  of  its  most  ordi- 
nary ingredients  is  traffic.  It  is  inconceivable,  that  the  power  to 
authorize  this  traffic,  when  given  in  the  most  comprehensive  terms, 
with  the  intent  that  its  efficiency  should  be  complete,  should  cease  at 
the  point  when  its  continuance  is  indispensable  to  its  value.  To 
what  purpose  should  the  power  to  allow  importation  be  given,  unac- 
companied with  the  power  to  authorize  a  sale  of  the  thing  imported  ? 
Sale  is  the  object  of  importation,  and  is  an  essential  ingredient  of 
that  intercourse,  of  which  importation  constitutes  a  part.  It  is  as 
essential  an  ingredient,  as  indispensable  to  the  existence  of  the  entire 
thing,  then,  as  importation  itself.  It  must  be  considered  as  a  com- 
ponent part  of  the  power  to  regulate  commerce.  Congress  has  a 
right,  not  only  to  authorize  importation,  but  to  authorize  the  im- 
porter to  sell. 

If  this  be  admitted,  and  we  think  it  cannot  be  denied,  what  can 
be  the  meaning  of  an  act  of  Congress  which  authorizes  importation, 
and  offers  the  privilege  for  sale  at  a  fixed  price  to  every  person  who 
chooses  to  become  a  purchaser?  How  is  it  to  be  construed,  if  an  in- 
tent to  deal  honestly  and  fairly,  an  intent  as  wise  as  it  is  moral, 
is  to  enter  into  the  construction?  What  can  be  the  use  of  the  con- 
tract, what  does  the  importer  purchase,  if  he  does  not  purchase  the 
privilege  to  sell? 

What  would  be  the  language  of  a  foreign  government,  which 
should  be  informed  that  its  merchants,  after  importing  according  to 
law,  were  forbidden  to  sell  the  merchandise  imported?  What  an- 
swer would  the  United  States  give  to  the  complaints  and  just  re- 


BROWN  V.  MARYLAND.  143 

preaches  to  which  such  an  extraordinary  circumstance  would  expose 
them?  No  apology  could  be  received,  or  even  offered.  Such  a  state 
of  things  would  break  up  commerce.  It  will  not  meet  this  argu- 
ment, to  say,  that  this  state  of  things  will  never  be  produced;  that 
the  good  sense  of  the  States  is  a  sufficient  security  against  it.  The 
Constitution  has  not  confided  this  subject  to  that  good  sense.  It  is 
placed  elsewhere.  The  question  is,  where  does  the  power  reside? 
not,  how  far  will  it  be  probably  abused?  The  power  claimed  by  the 
State,  is  in  its  nature,  in  conflict  with  that  given  to  Congress;  and 
the  greater  or  less  extent  in  which  it  may  be  exercised  does  not  enter 
into  the  inquiry  concerning  its  existence. 

We  think,  then,  that  if  the  power  to  authorize  a  sale  exists  in  Con- 
gress, the  conclusion  that  the  right  to  sell  is  connected  with  the  law 
permitting  importation,  as  an  inseparable  incident,  is  inevitable. 

If  the  principles  we  have  stated  be  correct,  the  result  to  which' 
they  conduct  us  cannot  be  mistaken.  Any  penalty  inflicted  on  the 
importer  for  selling  the  article  in  his  character  of  importer,  must  be 
in  opposition  to  the  act  of  Congress  which  authorizes  importation. 
Any  charge  on  the  introduction  and  incorporation  of  the  articles  into 
and  with  the  mass  of  property  in  the  country,  must  be  hostile  to  the 
power  given  to  Congress  to  regulate  commerce,  since  an  essential 
part  of  that  regulation,  and  principal  object  of  it,  is  to  prescribe  the 
regular  means  for  accomplishing  that  introduction  and  incorpora- 
tion. 

The  distinction  between  a  tax-  on  the  thing  imported,  and  on  the 
person  of  the  importer,  can  have  no  influence  on  this  part  of  the 
subject.  It  is  too  obvious  for  controversy,  that  they  interfere  equally 
with  the  power  to  regulate  commerce. 

It  has  been  contended,  that  this  construction  of  the  power  to  reg- 
ulate commerce,  as  was  contended  in  construing  the  prohibition  to 
lay  duties  on  imports,  would  abridge  the  acknowledged  power  of  a 
State  to  tax  its  own  citizens,  or  their  property  within  its  territory. 

We  admit  this  power  to  be  sacred;  but  cannot  admit  that  it  may 
be  used  so  as  to  obstruct  the  free  course  of  a  power  given  to  Con- 
gress. We  cannot  admit,  that  it  may  be  used  so  as  to  obstruct  or 
defeat  the  power  to  regulate  commerce.  It  has  been  observed,  that 
the  powers  remaining  with  the  States  may  be  so  exercised  as  to  come 
in  conflict  with  those  vested  in  Congress.  When  this  happens,  that 
which  is  not  supreme  must  yield  to  that  which  is  supreme.  This 
great  and  universal  truth  is  inseparable  from  the  nature  of  things, 
and  the  Constitution  has  applied  it  to  the  often  interfering  powers 
of  the  general  and  State  governments,  as  a  vital  principle  of  perpet- 


144  LIMITATIONS  OF  THE  TAXING  POWEH. 

ual  operation.  It  results,  necessarily,  from  this  principle,  that  the 
taxing  power  of  the  States  must  have  some  limits.  It  cannot  reach 
and  restrain  the  action  of  the  national  government  within  its  proper 
sphere.  It  cannot  reach  the  administration  of  justice  in  the  Courts 
of  the  Union,  or  the  collection  of  the  taxes  of  the  United  States,  or 
restrain  the  operation  of  any  law  which  Congress  may  constitution- 
ally pass.  It  cannot  interfere  with  any  regulation  of  commerce.  If 
the  States  may  tax  all  persons  and  property  found  on  their  territory, 
what  shall  restrain  them  from  taxing  goods  in  their  transit  through 
the  State  from  one  port  to  another,  for  the  purpose  of  re-exporta- 
tion? The  laws  of  trade  authorize  this  operation,  and  general  con- 
venience requires  it.  Or  what  should  restrain  a  State  from  taxing 
any  article  passing  through  it  from  one  State  to  another,  for  the 
purpose  of  traffic?  or  from  taxing  the  transportation  of  articles  pass- 
ing from  the  State  itself  to  another  State,  for  commercial  purposes? 
These  cases  are  all  within  the  sovereign  power  of  taxation,  but  would 
obviously  derange  the  measures  of  Congress  to  regulate  commerce, 
and  affect  materially  the  purpose  for  which  that  power  was  given. 
We  deem  it  unnecessary  to  press  this  argument  further,  or  to  give 
additional  illustrations  of  it,  because  the  subject  was  taken  up,  and 
considered  with  great  attention,  in  McCulloch  v.  The  State  of  Mary- 
land, (4  Wheat.  Rep.  316,)  the  decision  in  which  case  is,  we  think, 
entirely  applicable  to  this. 

It  may  be  proper  to  add,  that  we  suppose  the  principles  laid  down 
in  this  case,  to  apply  equally  to  importations  from  a  sister  State. 
We  do  not  mean  to  give  any  opinion  on  a  tax  discriminating  between 
foreign  and  domestic  articles. 

We  think  there  is  error  in  the  judgment  of  the  Court  of  Appeals 
of  the  State  of  Maryland,  in  affirming  the  judgment  of  the  Balti- 
more City  Court,  because  the  act  of  the  legislature  of  Maryland,  im- 
posing the  penalty  for  which  the  said  judgment  is  rendered,  is  re- 
pugnant to  the  Constitution  of  the  United  States  and,  consequently, 
void.  The  judgment  is  to  be  reversed,  and  the  cause  remanded  to 
that  Court,  with  instructions  to  enter  judgment  in  favour  of  the 
appellants. 

Mr.  Justice  THOMPSON  dissented. 


COOK  V.  PENNSYLVANIA.  145 


COOK  V.  PENNSYLVANIA. 

Supreme  Court  of  the  United  States.     October,  1878. 
97  United  States,  566. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 
The   act   of   the   legislature   of    Pennsylvania,   of    May   20,    1853, 
(Pamphlet  Laws,  683),  declares  that — 

"The  State  duty  to  be  paid  on  sales  by  auction  in  the  counties 
of  Philadelphia  and  Allegheny  shall  be  on  all  domestic  articles 
and  groceries,  one-half  of  one  per  cent;  on  foreign  drugs,  glass, 
earthenware,  hides,  marble-work,  and  dye-woods,  three-quarters 
of  one  per  cent." 

By  the  sixth  section  of  the  act  of  April  9,  1859,  the  law  was  mod- 
ified, as  follows: — 

"Said  auctioneers  shall  pay  into  the  treasury  of  the  Common- 
wealth a  tax  or  duty  of  one-fourth  of  one  per  cent  on  all  sales 
of  loans  or  stocks,  and  shall  also  pay  into  the  treasury  aforesaid 
a  tax  or  duty,  as  required  by  existing  laws,  on  all  other  sales 
to  be  made  as  aforesaid,  except  on  groceries,  goods,  wares,  and 
merchandise  of  American  growth  or  manufacture,  real  estate, 
shipping,  or  live  stock;  and  it  shall  be  the  duty  of  the  auction- 
eer having  charge  of  such  sales  to  collect  and  pay  over  to  the 
State  treasurer  the  said  duty  or  tax,  and  give  a  true  and  cor- 
rect account  of  the  same  quarterly,  under  oath  or  affirmation,  in 
the  form  now  required  by  law."  Pamphlet  Laws  436. 

The  effect  of  this  legislation  is,  that  by  the  first  statute  a  discrim- 
ination of  one-fourth  of  one  per  cent  is  made  against  foreign  goods 
sold  by  auction;  and  by  the  last  statute,  while  all  sales  of  foreign  or 
imported  goods  are  taxed,  those  arising  from  groceries,  goods,  wares, 
and  merchandise  of  American  growth  or  manufacture  are  exempt 
from  such  law. 

It  appears  that  the  law  also  required  these  auctioneers  to  take  out 
a  license,  to  make  report  of  such  sales,  and  to  pay  into  the  treasury 
the  taxes  on  these  sales. 

The  defendant  refused  to  pay  the  tax  for  which  he  was  liable  un- 
der this  law,  for  the  sale  of  goods  which  had  been  imported  and 
which  he  had  sold  for  the  importers  in  the  original  packages.  In 
the  suit,  in  which  judgment  was  rendered  against  him  in  the  Su- 
preme Court  of  Pennsylvania,  he  defended  himself  on  the  ground 
10 


146  LIMITATIONS  OF  THE  TAXING  POWER. 

that  these  statutes  were  void,  because  forbidden  by  sects.  8  and  10 
of  art.  1  of  the  Constitution  of  the  United  States. 

The  clauses  referred  to  are  those  which  give  to  Congress  power  to 
regulate  commerce  with  foreign  nations,  and  forbid  a  State,  without 
the  consent  of  Congress,  to  levy  any  imposts  or  duties  on  imports. 
The  case  stated  shows  that  the  goods  sold  by  defendant  were  import- 
ed goods,  and  that  they  were  sold  by  him  in  the  packages  in  which 
they  were  originally  imported.  It  is  conceded  by  the  Attorney-Gen- 
eral of  the  State,  that  if  the  statute  we  have  recited  is  a  tax  on  'these 
imports,  it  is  justly  obnoxious  to  the  objection  taken  to  it. 

But  it  is  argued  that  the  authority  of  the  auctioneer  to  make  any 
sales  is  derived  from  the  State,  and  that  the  State  can,  therefore, 
impose  upon  him  a  tax  for  the  privilege  conferred,  and  that  the  mode 
adopted  by  the  statute  of  measuring  that  tax  is  within  the  power  of 
the  State.  That  being  a  tax  on  him  for  the  right  or  privilege  to  sell 
at  auction,  it  is  not  a  tax  on  the  article  sold,  but  the  amount  of  the 
sales  made  by  him  is  made  the  measure  of  the  tax  on  that  privilege. 
In  support  of  this  view,  it  is  said  that  the  importer  could  himself 
have  made  sale  of  his  goods  without  subjecting  the  sale  to  the  tax. 
The  argument  is  fallacious,  because  without  an  auctioneer's  license 
he  could  not  have  sold  at  auction  even  his  own  goods.  If  he  had 
procured,  or  could  have  procured,  a  license,  he  would  then  have  been 
subject  by  the  statute  to  the  tax,  for  it  makes  no  exception.  By  the 
express  language  of  the  statute,  the  auctioneer  is  to  collect  this  tax 
and  pay  it  into  the  treasury.  From  whom  is  he  to  collect  it  if  not 
from  the  owner  of  the  goods?  If  the  tax  was  intended  to  be  levied 
on  the  auctioneer,  he  would  not  have  been  required  first  to  collect 
it  and  then  pay  it  over.  It  was,  then,  a  tax  on  the  privilege  of  sell- 
ing foreign  goods  at  auction,  for  such  goods  could  only  be  sold  at 
auction  by  paying  the  tax  on  the  amount  of  the  sales. 

The  question  as  thus  stated  has  long  ago  and  frequently  been  de- 
cided by  this  court. 

In  the  Passenger  Cases  (7  How.  283),  a  statute  of  New  York  was 
the  subject  of  consideration,  which  required  an  officer  of  the  city  of 
New  York,  called  the  health  commissioner,  to  collect  from  the  mas- 
ter of  every  vessel  from  a  foreign  port,  for  himself  and  each  cabin 
passenger  on  board  his  vessel,  one  dollar  and  fifty  cents,  and  for  each 
steerage  passenger,  mate,  sailor,  or  mariner,  one  dollar.  A  statute 
of  the  State  of  Massachusetts  was  also  considered,  which  enacted 
that  no  alien  passengers  (other  than  certain  diseased  persons  and 
paupers,  provided  for  in  a  previous  section)  should  be  permitted  to 
land  until  the  master,  owner,  consignee,  or  agent  of  such  vessel 


COOK  V.  PENNSYLVANIA.  147 

should  pay  to  the  regularly  appointed  boarding  officers  the  sum  of 
two  dollars  for  each  passenger  so  landing.  In  both  instances,  al- 
though the  master  or  the  owner  of  the  vessel  was  made  to  pay  the 
sum  demanded,  it  was  held  to  be  a  tax  on  the  passengers.  It  was  he 
whose  loss  it  was  when  paid,  and  the  burden  rested  ultimately  and 
solely  on  him.  Mr.  Chief  Justice  Taney  says:  "It  is  demanded  of 
the  captain,  and  not  from  every  separate  passenger,  for  the  conve- 
nience of  collection.  But  the  burden  evidently  falls  on  the  passen- 
ger, and  he,  in  fact,  pays  it,  either  in  the  enhanced  price  of  his  pas- 
sage, or  directly  to  the  captain,  before  he  is  allowed  to  embark  for 
the  voyage."  Because  it  was  such  a  tax,  the  majority  of  the  court 
held  it  to  be  unconstitutional  and  void. 

In  the  case  of  Crandall  v.  State  of  Nevada,  (6  Wall.  35),  the 
State  had  passed  a  law  requiring  those  in  charge  of  all  the  stage- 
coaches and  railroads  doing  business  in  the  State  to  make  report  of 
every  passenger  who  passed  through  the  State  or  went  out  of  it  by 
their  conveyances,  and  to  pay  a  tax  of  one  dollar  for  every  such  pas- 
senger. The  argument  was  urged  there,  that  the  tax  was  laid  on 
the  business  of  the  railroad  and  stage-coach  companies,  and  the  sum 
of  one  dollar  exacted  for  each  passenger  was  only  a  mode  of  measur- 
ing the  business  to  be  taxed.  But  the  court  said,  as  in  Passenger 
Cases,  that  it  was  a  tax  which  must  fall  on  the  passenger,  and  be 
paid  by  him  for  the  privilege  of  riding  through  the  State  by  the 
usual  vehicles  of  travel. 

•  ••••••••• 

In  Henderson  v.  The  Mayor  (92  U.  S.  259),  where  the  owners  of 
vessels  from  a  foreign  port  were  required  to  give  a  bond,  as  security, 
that  every  passenger  whom  they  landed  should  not  become  a  burden 
on  the  State,  or  pay  for  every  such  passenger  a  fixed  sum,  it  was 
held  to  be  in  effect  a  tax  of  that  sum  on  the  passenger,  however  dis- 
guised by  the  alternative  of  a  bond  which  would  never  be  given.  The 
court  said,  that  "in  whatever  language  a  statute  may  be  framed,  its 
purpose  must  be  determined  by  its  natural  and  reasonable  effect;  and 
if  it  is  apparent  that  the  object  of  this  statute,  as  judged  by  that 
criterion,  is  to  compel  the  owners  of  vessels  to  pay  a  sum  of  money 
for  every  passenger  brought  by  them  from  a  foreign  shore  and  land- 
ed at  the  port  of  New  York,  it  is  as  much  a  tax  on  passengers,  if 
collected  from  them,  or  a  tax  on  the  vessel  owner  for  the  exercise  of 
the  right  of  landing  their  passengers  in  that  city,  as  was  the  statute 
held  void  in  the  Passenqer  Cases." 

To  the  same  effect,  and  probably  more  directly  in  point,  is  tho 
case  of  Welton  v.  State  of  Missouri  (91  id.  275),  decided  at  the  same 


148  LIMITATIONS  OF  THE  TAXING  POWER. 

term.  In  that  case,  pedlers  were  required,  under  a  severe  penalty,  to 
take  out  a  license ;  and  those  only  were  held  to  be  pedlers  who  dealt  in 
goods,  wares,  and  merchandise  which  were  not  of  the  growth,  pro- 
duce, or  manufacture  of  the  State.  The  court,  after  referring  to  the 
case  of  Brown  v.  Maryland,  relied  on  by  defendant  here,  adds:  "So, 
in  like  manner,  the  license  tax  exacted  by  the  State  of  Missouri  from 
dealers  in  goods  which  are  not  the  product  of  manufacture  of  the 
State,  before  they  can  be  sold  from  place  to  place  within  the  State, 
must  be  regarded  as  a  tax  upon  such  goods  themselves  and  the  ques- 
tion presented  is,  whether  legislation,  thus  discriminating  against  the 
products  of  other  States  in  the  conditions  of  their  sale  by  a  certain 
class  of  dealers,  is  valid  under  the  Constitution  of  the  United 
States."  And  it  was  decided  that  it  was  not.  See  also  Waring  v.  The 
Mayor,  8  Wall.  110. 

The  tax  on  sales  made  by  an  auctioneer  is  a  tax  on  the  goods  sold, 
within  the  terms  of  this  last  decision,  and,  indeed,  within  all  the 
cases  cited;  and  when  applied  to  foreign  goods  sold  in  the  original 
packages  of  the  importer,  before  they  have  become  incorporated  into 
the  general  property  of  the  country,  the  law  imposing  such  tax  is 
void  as  laying  a  duty  on  imports. 

In  Woodruff  v.  Parham  (8  Wall.  123)  and  Hinson  v.  Lott  (id. 
128),  it  was  held  that  a  tax  laid  by  a  law  of  the  State  in  such  a 
manner  as  to  discriminate  unfavorably  against  goods  which  were  the 
product  or  manufacture  of  another  State,  was  a  regulation  of  com- 
merce between  the  States,  forbidden  by  the  Constitution  of  the  Unit- 
ed States.  The  doctrine  is  reasserted  in  the  case  of  Welton  v.  State 
of  Missouri,  supra.  The  Congress  of  the  United  States  is  granted 
the  power  to  regulate  commerce  with  foreign  nations  in  precisely  the 
same  language  as  it  is  that  among  the  States.  If  a  tax  assessed  by 
a  State  injuriously  discriminating  against  the  products  of  a  State  of 
the  Union  is  forbidden  by  the  Constitution,  a  similar  tax  against 
goods  imported  from  a  foreign  State  is  equally  forbidden. 

A  careful  reader  of  the  history  of  the  times  which  immediately 
preceded  the  assembling  of  the  convention  that  framed  the  Ameri- 
can Constitution  cannot  fail  to  discover  that  the  need  of  some  equi- 
table and  just  regulation  of  commerce  was  among  the  most  influen- 
tial causes  which  led  to  its  meeting.  States  having  fine  harbors  im- 
posed unlimited  tax  on  all  goods  reaching  the  Continent  through 
their  ports.  The  ports  of  Boston  and  New  York  were  far  behind 
Newport,  in  the  State  of  Ehode  Island,  in  the  value  of  their  im- 
ports; and  that  small  State  was  paying  all  the  expenses  of  her  gov- 
ernment by  the  duties  levied  on  the  goods  landed  at  her  principal 


COOK  V.  PENNSYLVANIA.  149 

port.  And  so  reluctant  was  she  to  give  up  this  advantage,  that  she 
refused  for  nearly  three  years  after  the  other  twelve  original  States 
had  ratified  the  Constitution,  to  give  it  her  assent. 

In  granting  to  Congress  the  right  to  regulate  commerce  with  for- 
eign nations,  and  among  the  several  States,  and  with  the  Indian 
tribes,  and  in  forbidding  the  States  without  the  consent  of  that 
body  to  levy  any  tax  on  imports,  the  framers  of  the  Constitution  be- 
lieved that  they  had  sufficiently  guarded  against  the  dangers  of  any 
taxation  by  the  States  which  would  interfere  with  the  freest  inter- 
change of  commodities  among  the  people  of  the  different  States,  and 
by  the  people  of  the  States  with  citizens  and  subjects  of  foreign  gov- 
ernments. 

The  numerous  cases  in  which  this  court  has  been  called  on  to  de- 
clare void  statutes  of  the  States  which  in  various  ways  have  sought 
to  violate  this  salutary  restriction,  show  the  necessity  and  value  of 
the  constitutional  provision.  If  certain  States  could  exercise  the  un- 
limited power  of  taxing  all  the  merchandise  which  passes  from  the 
port  of  New  York  through  those  States  to  the  consumers  in  the 
great  West,  or  could  tax — as  ha?  been  done  until  recently — every 
person  who  sought  the  seaboard  through  the  railroads  within  their 
jurisdiction,  the  Constitution  would  have  failed  to  effect  one  of  the 
most  important  purposes  for  which  it  was  adopted. 

A  striking  instance  of  the  evil  and  its  cure  is  to  be  seen  in  the 
recent  history  of  the  States  now  composing  the  German  Empire.  A 
few  years  ago  they  were  independent  States,  which,  though  lying 
contiguous,  speaking  a  common  language,  and  belonging  to  a  com- 
mon race,  were  yet  without  a  common  government. 

The  number  and  variety  of  their  systems  of  taxation  and  lines  of 
territorial  division  necessitating  customs  officials  at  every  step  the 
traveller  took  or  merchandise  was  transported,  became  so  intolerable, 
that  a  commercial,  though  not  a  political  union  was  organized,  called 
the  German  Zollverein.  The  great  value  of  this  became  so  apparent, 
and  the  community  of  interests  so  strongly  felt  in  regard  to  com- 
merce and  traffic,  that  the  first  appropriate  occasion  was  used  by 
these  numerous  principalities  to  organize  a  common  political  gov- 
ernment now  known  as  the  German  Empire. 

While  there  is,  perhaps,  no  special  obligation  on  this  court  to  de- 
fend the  wisdom  of  the  Constitution  of  the  United  States,  there  is 
the  duty  to  ascertain  the  purpose  of  its  provisions,  and  to  give  them 
full  effect  when  called  on  by  a  proper  case  to  do  so. 

The  judgment  of  the  Supreme  Court  of  Pennsylvania  will  be  re- 
versed, and  the  case  remanded  for  further  proceedings,  in  conform- 
ity with  this  opinion;  and  it  is  So  ordered. 


150  LIMITATIONS  OF  THE  TAXING  POWER. 

WARING  V.  THE  MAYOR. 

Supreme  Court  of  the  United  States.     December,  1868. 
8  Wallace,  110. 

Mr.  Justice  CLIFFORD  delivered  the  opinion  of  the  court. 

Merchants  and  traders,  engaged  in  selling  merchandise  in  the  city 
of  Mobile  in  the  State  of  Alabama,  are  required  by  an  ordinance 
passed  by  the  corporate  authorities  to  pay  a  tax  to  the  city  equal  to 
one-half  of  one  per  cent,  on  the  gross  amount  of  their  sales,  whether 
the  merchandise  was  sold  at  private  sale  or  at  public  auction;  and  if 
they  were  not  so  engaged  the  six  months  next  preceding  the  1st  day 
of  April,  1866,  they  were  also  required,  within  fifteen  days  thereafter 
to  return,  under  oath,  to  the  collector  of  taxes,  the  gross  amount  of 
their  sales  during  that  period  of  time;  and  the  provision  was,  that 
if  any  such  merchant  or  trader  neglected  or  failed  to  make  such 
return,  he  should  be  subject  to  such  a  fine,  not  exceeding  fifty  dol- 
lars per  day,  as  the  mayor  of  the  city  might  impose  for  each  day's 
failure  or  refusal. 

Sales  of  merchandise  were  made  by  the  complainant  within  that 
period  to  a  large  amount,  and  he  was  duly  notified  that  he  was  re- 
quired to  make  return,  under  oath,  of  the  gross  amount  of  such  sales, 
and  having  neglected  and  refused  to  comply  with  that  requirement 
within  the  time  specified  in  the  ordinance,  the  mayor  of  the  city 
caused  a  summons  to  be  issued  and  duly  served,  commanding  the 
complainant  to  appear  before  him,  as  such  mayor,  to  answer  for  such 
neglect,  but  he  refused  to  obey  the  commands  of  the  summons,  and 
thereupon  a  warrant  was  issued,  and  he  was  arrested  and  brought 
before  the  mayor  to  answer  for  such  contempt;  and,  after  hearing, 
he  was  sentenced  to  pay  a  fine  of  fifty  dollars  for  a  breach  of  the 
before-mentioned  ordinance.  Subsequently,  a  second  notice  of  a  sim- 
ilar character  was  given,  and  the  complainant  still  neglecting  and 
refusing  to  make  the  required  returns,  he  was  again  summoned  to 
appear  before  the  mayor  to  answer  for  the  neglect,  but  he  refused  a 
second  time  to  obey  the  commands  of  the  precept,  and,  thereupon, 
such  proceedings  were  had  that  he  was  again  found  guilty  of  con- 
tempt and  was  sentenced  to  pay  an  additional  fine  of  fifty  dollars. 

Regarding  these  proceedings  as  unwarranted,  the  complainant  filed 
a  bill  in  equity  against  the  mayor  and  tax-collector  of  the  city,  in 
the  local  Chancery  Court,  in  which  he  prayed  that  the  respondents 
might  be  enjoined  from  collecting  the  fines  adjudged  against  him, 
and  from  any  attempt  to  collect  the  tax,  and  that  the  tax  might  be 


WARING  V.  THE  MAYOR.  151 

adjudged  to  be  null  and  void.  Proofs  were  taken  and  the  parties 
\^ere  heard,  and  the  final  decree  of  the  Chancellor  was,  that  the  com- 
plainant was  entitled  to  the  relief  asked,  and  that  the  injunction 
should  be  made  perpetual;  but  that  decree,  on  the  appeal  of  the  re- 
spondents to  the  Supreme  Court  of  the  State,  was,  in  all  things,  re- 
versed, and  the  Supreme  Court  entered  a  decree  that  the  bill  of  com- 
plaint should  be  dismissed.  •  Whereupon  the  complainant  in  the 
Chancery  Court  sued  out  a  writ  of  error,  under  the  25th  section  of 
the  Judiciary  Act,  and  removed  the  cause  into  this  court. 

Exemption  from  State  taxation  in  this  case  is  claimed  by  com- 
plainant upon  the  ground  that  the  sales  made  by  h'im  were  of  mer- 
chandise, in  the  original  packages,  as  imported  from  a  foreign  coun- 
try, and  which  was  purchased  by  him,  in  entire  cargoes,  of  the  con- 
signees of  the  importing  vessels  before  their  arrival,  or  while  the  ves- 
sels were  in  the  lower  harbor  of  the  port. 

Whether  the  contracts  to  purchase  were  made  before  or  after  the 
vessel  arrived  in  the  bay  is  quite  immaterial,  as  the  agreement  was, 
that  the  risk  should  continue  to  be  in  the  owner  or  consignees  until 
they  delivered  the  salt  into  the  complainant's  lighters,  alongside  of 
the  vessel.  Delivery,  under  the  terms  of  the  contract,  could  not  bo 
made  before  the  vessel  arrived,  nor  before  the  salt  was  legally  en- 
tered at  the  custom-house,  as  the  hatches  could  not  be  removed  for 
any  such  purpose  until  the  permit  was  received  from  the  collector. 

Undoubtedly  goods  at  sea  may  be  sold  by  the  consignees  to  arrive, 
and  if  they  indorse  and  deliver  the  bill  of  lading  to  the  purchaser, 
and  he  accepts  the  same  under  the  contract  as  the  proper  substitute 
for  the  actual  delivery  and  acceptance  of  the  goods,  the  effect  of  the 
transaction  is  to  vest  a  perfect  title  in  the  purchaser,  discharged  of 
all  right  of  stoppage  in  transitu  on  the  part  of  the  vendor  and  in- 
dorser  of  the  bill  of  lading. 

Nothing  of  the  kind,  however,  was  done  in  this  case.  On  the  con- 
trary, the  agreement  was,  that  the  loss,  if  before  the  delivery  of  the 
goods  into  the  lighters,  should  fall  on  the  shippers.  Influenced  by 
these  considerations  the  court  is  of  the  opinion  that  the  shippers  or 
consignees  were  the  importers  of  the  salt,  and  that  the  complainant 
was  the  purchaser  of  the  importers,  and  the  second  vendor  of  th« 
imported  merchandise. 

Congress  has  the  power  to  regulate  commerce  with  foreign  nations 
and  among  the  several  States,  and  with  the  Indian  tribes,  and  the 
Constitution  also  provides  that  no  State  shall,  without  the  consent 


152  LIMITATIONS  OF  TJLK  TAXING  POWER. 

of  the  Congress,  lay  any  impost?  or  duties  on  imports  or  exports,  ex- 
cept what  may  be  absolutely  necessary  for  executing  its  inspection 
laws,  with  a  view  to  raise  a  revenue  for  State  purposes.  The  State 
of  Maryland  passed  a  law  requiring  all  importers  of  foreign  arti- 
cles, enumerated  in  the  law,  and  other  persons  selling  the  same  by 
wholesale,  before  they  should  be  authorized  to  sell  the  imported  arti- 
cles, to  take  a  license,  for  which  they  were  required  to  pay  fifty  dol- 
lars, and  in  case  of  refusal  or  neglect,  the  provision  was,  that  they 
should  forfeit  the  amount  of  the  license  tax  and  be  subject  to  a  fine 
of  one  hundred  dollars.  (Brown  v.  Maryland,  12  Wheaton,  437.) 
Subsequently  an  importing  merchant,  resident  in  the  State,  refused 
to  pay  the  tax,  and  the  State  Court  sustained  the  validity  of  the 
State  law,  and  imposed  on  him  the  penalty  therein  prescribed.  Dis- 
satisfied with  the  judgment  he  removed  the  cause  into  this  court  by 
writ  of  error,  and  this  court  held,  Marshall,  C.  J.,  giving  the  opin- 
ion of  the  court,  that  the  State  law  was  a  tax  on  imports,  and  that 
the  mode  of  levying  it,  as  by  a  tax  on  the  occupation  of  the  im- 
porter, merely  varied  the  form  in  which  the  tax  was  imposed  without 
varying  the  substance;  that  while  the  articles  imported  remained  the 
property  of  the  importer  in  his  warehouse  in  the  original  forms  or 
packages  in  which  they  were  imported,  a  tax  upon  them  was  too 
plainly  a  duty  on  imports  to  escape  the  prohibition  of  the  Constitu- 
tion, but  the  court  admitted  that  whenever  the  importer  had  so  acted 
upon  the  thing  imported  that  it  has  become  incorporated  and  mixed 
with  the  mass  of  property  in  the  country,  it  must  be  considered  as 
having  lost  its  distinctive  character  as  an  import,  and  as  having  be- 
come subject  to  the  taxing  power  of  the  State. 

Sales  by  the  importer  are  held  to  be  exempt  from  State  taxation 
because  the  importer  purchases,  by  the  payment  of  the  duty,  a  right 
to  dispose  of  the  merchandise  as  well  as  to  bring  it  into  the  coun- 
try, and  because  the  tax,  if  it  were  held  to  be  valid,  would  intercept 
the  import,  as  an  import,  in  the  way  to  become  incorporated  with 
the  general  mass  of  property,  and  would  deny  it  the  privilege  of  be- 
coming so  incorporated  until  it  should  have  contributed  to  the  rev- 
enue of  the  State.  (Brown  v.  Maryland,  12  Wheaton,  443;  Almy  v. 
California,  24  Howard,  173.) 

But  the  sales  of  the  goods  imported  in  this  case  were  made  by  the 
shippers  or  consignees,  and  the  complainant  was  the  purchaser,  and 
not  the  first  vendor  of  the  imported  merchandise,  and  it  is  settled 
law  in  this  court  that  merchandise  in  the  original  packages  once 
sold  by  the  importer  is  taxable  as  other  property.  (Pervear  v.  Com- 
monwealth, 5  Wallace,  479.) 


WOODRUFF  V.  PARHAM.  153 

When  the  importer  sells  the  imported  articles,  or  otherwise  mixes 
them  with  the  general  property  of  the  State  by  breaking  up  the 
packages,  the  state  of  things  changes,  as  was  said  by  this  court  in 
the  leading  case,  as  the  tax  then  finds  the  articles  already  incorpo- 
rated with  the  mass  of  property  by  the  act  of  the  importer. 

Importers  selling  the  imported  articles  in  the  original  packages  are 
shielded  from  any  such  State  tax,  but  the  privilege  of  exemption  is 
not  extended  to  any  purchaser,  as  the  merchandise,  by  the  sale  and 
delivery,  loses  its  distinctive  character  as  an  import, 

Decree  affirmed. 

Original  packages  are  the  boxes  or  cases  in  which  the  goods  are  shipped 
and  not  the  packages  in  which  goods  are  placed  by  mak*er,  and  which  are  sur- 
rounded by  an  outer  case.  May  v.  New  Orleans  178  U.  S.,  496. 


WOODRUIFF  V.  PARHAM. 

Supreme  Court  of  the  United  States.     December,  1868. 
8  Wallace,  123. 

Error  to  the  Supreme  Court  of  Alabama.     The  case  being  thus: 

The  Constitution  thus  ordains: 

"Congress  shall  have  power  to  regulate  commerce  with  foreign 
nations  and  among  the  several  States." 

"No  State  shall  levy  any  imposts  or  duties  on  imports  or 
exports." 

"The  citizens  of  each  State  shall  be  entitled  to  all  the  immuni- 
ties and  privileges  of  citizens  of  the  several  States." 

With  these  declarations  of  the  Constitution  in  force,  the  city  of 
Mobile,  Alabama,  in  accordance  with  a  provision  in  its  charter,  au- 
thorized the  collection  of  a  tax  for  municipal  purposes  on  real  and 
personal  estate,  sales  at  auction,  and  sales  of  merchandise,  capital 
employed  in  business  and  income  within  the  city.  This  ordinance 
being  on  the  city  statute  book,  Woodruff  and  others,  auctioneers,  re- 
ceived, in  the  course  of  their  business  for  themselves,  or  as  consign- 
ees and  agents  for  others,  large  amounts  of  goods  and  merchandise, 
the  product  of  States  other  than  Alabama,  and  sold  the  same  in 
Mobile  to  purchasers  in  the  original  and  unbroken  packages.  There- 
upon, the  tax  collector  for  the  city,  demanded  the  tax  levied  by  the 
ordinance.  Woodruff  refused  to  pay  the  tax,  asserting  that  it  was 
repugnant  to  the  above-quoted  provisions  of  the  Constitution.  The 
question  coming  finally,  on  a  case  stated,  in  to  the  Supreme  Court 


154  LIMITATIONS  OF  THE  TAXING  POWEE. 

of  the  State,  where  the  first  two  of  the  above-quoted  provisions  of 
the  Constitution  were  relied  on  by  the  auctioneers  as  a  bar  to  the 
suit,  and  said  court  decided  in  favor  of  the  tax.  And  the  question 
was  now  here  for  review. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 

The  case  was  heard  in  the  courts  of  the  State  of  Alabama  upon 
an  agreed  statement  of  facts,  and  that  statement  fully  raises  the 
question  whether  merchandise  brought  from  other  States  and  sold, 
under  the  circumstances  stated,  comes  within  the  prohibition  of  the 
Federal  Constitution,  that  no  State  shall,  without  the  consent  of 
Congress,  levy  any  imposts  or  duties  on  imports  o*r  exports.  And  it 
is  claimed  that  it  also  brings  the  case  within  the  principles  laid 
down  by  this  court  in  Brown  v.  Maryland.  (12  Wheaton  419). 

That  decision  has  been  recognized  for  over  forty  years  as  gov- 
erning the  action  of  this  court  in  the  same  class  of  cases,  and  its 
reasoning  has  been  often  cited  and  received  with  approbation  in  oth- 
ers to  which  it  was  applicable.  We  do  not  now  propose  to  question 
its  authority  or  to  depart  from  its  principles. 

The  tax  of  the  State  of  Maryland,  which  was  the  subject  of  con- 
troversy in  that  case,  was  limited  by  its  terms  to  importers  of  for- 
eign articles  or  commodities,  and  the  proposition  that  we  are  now 
to  consider  is  whether  the  provision  of  the  Constitution  to  which 
we  have  referred  extends,  in  its  true  meaning  and  intent,  to  articles 
brought  from  one  State  of  the  Union  into  another. 

The  words  impost,  imports,  and  exports  are  frequently  used  in  the 
Constitution.  They  have  a  necessary  correlation,  and  when  we  have 
a  clear  idea  of  what  either  word  means  in  any  particular  connection 
in  which  it  may  be  found,  we  have  one  of  the  most  satisfactory  tests 
of  its  definition  in  other  parts  of  the  same  instrument. 

In  the  case  of  Brown  v.  Maryland,  the  word  imports,  as  used  in 
the  clause  now  under  consideration,  is  defined,  both  on  the  authority 
of  the  lexicons  and  usage,  to  be  articles  brought  into  the  country; 
and  impost  is  there  said  to  be  a  duty,  custom  or  tax  levied  on  arti- 
cles brought  into  the  country.  In  the  ordinary  use  of  these  terms 
at  this  day,  no  one  would,  for  a  moment,  think  of  them  as  having 
relation  to  any  other  articles  than  those  brought  from  a  country  for- 
eign to  the  United  States,  and  at  the  time  the  case  of  Brown  v. 
Maryland  was  decided — namely,  in  1827 — it  is  reasonable  to  sup- 
pose the  general  usage  was  the  same,  and  that  in  defining  imports  aa 
articles  brought  into  the  country,  the  Chief  Justice  used  the  word 
country  as  a  synonyme  for  United  States. 


WOODRUFF  V.  PARHAM.  155 

But  the  word  is  susceptible  of  being  applied  to  articles  introduced 
from  one  State  into  another,  and  we  must  inquire  if  it  was  so  used 
by  the  framers  of  the  Constitution. 

Leaving,  then,  for  a  moment,  the  clause  of  the  Constitution  under 
consideration,  we  find  the  first  use  of  any  of  these  correlative  terms 
in  that  clause  of  the  eighth  section  of  the  first  article,  which  begins 
the  enumeration  of  the  powers  confided  to  Congress. 

"The  Congress  shall  have  power  to  levy  and  collect  taxes,  duties, 
imposts,  and  excises,  .  .  .  but  all  duties,  imposts  and  excises 
shall  be  uniform  throughout  the  United  States." 

Is  the  word  impost,  here  used,  intended  to  confer  upon  Congress  a 
distinct  power  to  levy  a  tax  upon  all  goods  or  merchandise  carried 
from  one  State  into  another?  Or  is  the  power  limited  to  duties  on 
foreign  imports?  If  the  former  be  intended,  then  the  power  con- 
ferred is  curiously  rendered  nugatory  by  the  subsequent  clause  of  the 
ninth  section,  which  declares  that  no  tax  shall  be  laid  on  articles  ex- 
ported from  any  State,  for  no  article  can  be  imported  from  one  State 
into  another  which  is  not,  at  the  same  time,  exported  from  the  for- 
mer. But  if  we  give  to  the  word  imposts,  as  used  in  the  first-men- 
tioned clause,  the  definition  of  Chief  Justice  Marshall,  and  to  the 
word  export  the  corresponding  idea  of  something  carried  out  of  the 
United  States,  we  have,  in  the  power  to  lay  duties  on  imports  from 
abroad,  and  the  prohibition  to  lay  such  duties  on  exports  to  other 
countries,  the  power  and  its  limitations  concerning  imposts. 

It  is  also  to  be  remembered  that  the  Convention  was  here  giving 
the  right  to  lay  taxes  by  National  authority  in  connection  with  pay- 
ing the  debts  and  providing  for  the  common  defence  and  the  general 
welfare,  and  it  is  a  reasonable  inference  that  they  had  in  view,  in 
the  use  of  the  word  imports,  those  articles,  which,  being  introduced 
from  other  nations  and  diffused  generally  over  the  country  for  con- 
sumption, would  contribute,  in  a  common  and  general  way,  to  the 
support  of  the  National  government.  If  internal  taxation  should  be- 
come necessary,  it  was  provided  for  by  the  terms  taxes  and  excises. 

There  are  two  provisions  of  the  clause  under  which  exemption 
from  State  taxation  is  claimed  in  this  case,  which  are  not  without 
influence  on  that  prohibition,  namely:  that  any  State  may,  with  the 
assent  of  Congress,  lay  a  tax  on  imports,  and  that  the  net  produce 
of  such  tax  shall  be  for  the  benefit  of  the  Treasury  of  the  United 
States.  The  framers  of  the  Constitution,  claiming  for  the  General 
Government,  as  they  did,  all  the  duties  on  foreign  goods  imported 
into  the  country,  might  well  permit  a  State  that  wished  to  tax  more 
heavily  than  Congress  did,  foreign  liquors,  tobacco,  or  other  articles 


156  LIMITATIONS  OF  THE  TAXING  POWER. 

injurious  to  the  community,  or  which  interfered  with  their  domestic 
policy,  to  do  so,  provided  such  tax  met  the  approbation  of  Congress, 
and  was  paid  into  the  Federal  treasury.  But  that  it  was  intended 
to  permit  such  a  tax  to  be  imposed  by  such  authority  on  the  products 
of  neighboring  States  for  the  use  of  the  Federal  government,  and 
that  Congress,  under  this  temptation,  was  to  arbitrate  between  the 
State  which  proposed  to  levy  the  tax  and  those  which  opposed  it, 
seems  altogether  improbable. 

Yet  this  must  be  the  construction  of  the  clause  in  question  if  it 
has  any  reference  to  goods  imported  from  one  State  to  another. 

If  we  turn  for  a  moment  from  the  consideration  of  the  language 
of  the  Constitution  to  the  history  of  its  formation  and  adoption,  we 
shall  find  additional  reason  to  conclude  that  the  words  imports  and 
imposts  were  used  with  exclusive  reference  to  articles  imported  from 
foreign  countries. 

Section  three,  article  six,  of  the  Confederation  provided  that  no 
State  should  lay  imposts  or  duties  which  might  interfere  with  any 
stipulation  in  treaties  entered  into  by  the  United  States;  and  sec- 
tion one,  article  nine,  that  no  treaty  of  commerce  should  be  made 
whereby  the  legislative  power  of  the  respective  States  should  be  re- 
strained from  imposing  such  imposts  and  duties  on  foreigners  as  their 
own  people  were  subjected  to,  or,  from  prohibiting  the  exportation 
or  importation  of  any  species  of  goods  or  commodities  whatsoever. 
In  these  two  articles  of  the  Confederation,  the  words  imports,  ex- 
ports, and  imposts  are  used  with  exclusive  reference  to  foreign  trade, 
because  they  have  regard  only  to  the  treaty-making  power  of  the 
federation. 

As  soon  as  peace  was  restored  by  the  success  of  the  Eevolution, 
and  commerce  began  to  revive,  it  became  obvious  that  the  most  eli- 
gible mode  of  raising  revenue  for  the  support  of  the  General  Govern- 
ment and  the  payment  of  its  debts  was  by  duties  on  foreign  mer- 
chandise imported  into  the  country.  The  Congress  accordingly  rec- 
ommended the  States  to  levy  a  duty  of  five  per  cent,  on  all  such 
imports,  for  the  use  of  the  Confederation.  To  this,  Rhode  Island, 
which,  at  that  time,  was  one  of  the  largest  importing  States,  object- 
ed, and  we  have  a  full  report  of  the  remonstrance  addressed  by  a 
committee  of  Congress  to  that  State  on  that  subject.  (1  Elliot's 
Debates,  131-3.)  And  the  discussions  of  the  Congress  of  that  day, 
as  imperfectly  as  they  have  been  preserved,  are  full  of  the  subject  of 
the  injustice  done  by  the  .States  who  had  good  sea  ports,  by  duties 
levied  in  those  ports  on  foreign  goods  designed  for  States  who  had 
no  such  ports. 


WOODRUFF  V.  PARHAM.  1:,; 

In  this  state  of  public  feeling  in  this  matter,  the  Constitutional 
Convention  assembled. 

Its  very  first  grant  of  power  to  the  new  government  about  to  be 
established,  was  to  lay  and  collect  imposts  or  duties  on  foreign  goods 
imported  into  the  country,  and  among  its  restraints  upon  the  States 
was  the  corresponding  one  that  they  should  lay  no  duties  on  imports 
or  exports.  Jt  seems,  however,  from  Mr.  Madison's  account  of  the 
debates,  that  while  the  necessity  of  vesting  in  Congress  the  power  to 
levy  duties  on  foreign  goods  was  generally  conceded,  the  right  of  the 
States  to  do  so  likewise  was  not  given  up  without  discussion,  and  was 
finally  yielded  with  the  qualification  to  which  we  have  already  re- 
ferred, that  the  States  might  lay  such  duties  with  the  assent  of  Con- 
gress. Mr.  Madison  moved  that  the  words  "nor  lay  imposts  or  du- 
ties on  imports"  be  placed  in  that  class  of  prohibitions  which  were 
absolute,  instead  of  those  which  were  dependent  on  the  consent  of 
Congress.  His  reason  was  that  the  States  interested  in  this  power, 
(meaning  those  who  had  good  seaports),  by  which  they  could  tax 
the  imports  of  their  neighbors  passing  through  their  markets,  were 
a  majority,  and  could  gain  the  consent  of  Congress  to  the  injury  of 
Xew  Jersey,  North  Carolina,  and  other  non  importing  States.  But 
his  motion  failed.  {5  Madison  Papers,  486.)  In  the  Convention  of 
Virginia,  called  to  adopt  the  Constitution,  that  distinguished  ex- 
pounder and  defender  of  the  instrument,  so  largely  the  work  of  his 
own  hand,  argued,  in  support  of  the  authority  to  lay  direct  taxes, 
that  without  this  power,  a  disproportion  of  burden  would  be  im- 
posed on  the  Southern  States,  because  having  fewer  manufactures, 
they  would  consume  more  imports  and  pay  more  of  the  imposts.  (3 
Elliot's  Debates,  248.)  So,  in  defending  the  clause  of  the  Constitu- 
tion now  under  our  consideration,  he  says:  "Some  States  export  the 
produce  of  other  States.  Virginia  exports  the  produce  of  North 
Carolina;  Pennsylvania  those  of  New  Jersey  and  Delaware;  and 
Rhode  Island,  those  of  Connecticut  and  Massachusetts.  The  export- 
ing States  wished  to  retain  the  power  of  laying  duties  on  exports  to 
enable  them  to  pay  expenses  incurred.  The  States  whose  produce 
was  exported  by  other  States,  were  extremely  jealous  lest  a  contribu- 
tion should  be  raised  of  them  by  the  exporting  States,  by  laying 
heavy  duties  on  their  own  commodities.  If  this  clause  be  fully  con- 
sidered it  will  be  found  to  be  more  consistent  with  justice  and  equity 
than  any  other  practicable  mode;  for,  if  the  States  had  the  exclusive 
imposition  of  duties  on  exports,  they  might  raise  d.  heavy  contribu- 
tion of  the  other  States  for  their  own  exclusive  emoluments."  (2  id. 
443-4.)  Similar  observations,  from  the  same  source  are  found  in 


158  LIMITATIONS  OF  THE  TAXING  POWER. 

the  42d  number  of  the  Federalist,  but  with  more  direct  reference  to 
the  power  to  regulate  commerce. 

Governor  Ellsworth,  in  opening  the  debate  of  the  Connecticut 
Convention  on  the  adoption  of  the  Constitution,  says:  "Our  being 
tributary  to  our  sister  States,  is  in  consequence  of  the  want  of  a 
Federal  system.  The  State  of  New  York  raises  £60,000  or  £80,000 
in  a  year  by  impost.  Connecticut  consumes  about  one-third  of  the 
goods  upon  which  this  impost  is  laid,  and  consequently  pays  one- 
third  of  this  sum  to  New  York. 

"If  we  import  by  the  medium  of  Massachusetts,  she  has  an  impost, 
and  to  her  we  pay  tribute."  (2  Elliot's  Debates,  192.)  A  few 
days  later,  he  says:  "I  find,  on  calculation,  that  a  general  impost 
of  five  per  cent,  would  raise  a  sum  of  £245,000,"  and  adds;  "it  is  a 
strong  argument  in  favor  of  an  impost,  that  the  collection  of  it  will 
interfere  less  with  the  internal  police  of  the  States  than  any  other 
species  of  taxation.  It  does  not  fill  the  country  with  revenue  offi- 
cers, but  is  confined  to  the  seacoast,  and  is  chiefly  a  water  operation. 

If  we  do  not  give  it  to  Congress,  the  individual  States 

will  have  it."  (2  Id.  196.) 

It  is  not  too  much  to  say  that,  so  far  as  our  research  has  ex- 
tended, neither  the  word  export,  import,  or  impost  is  to  be  found  in 
the  discussions  on  this  subject,  as  they  have  come  down  to  us  from 
that  time,  in  reference  to  any  other  than  foreign  commerce,  without 
some  special  form  of  words  to  show  that  foreign  commerce  is  not 
meant.  The  only  allusion  to  imposts  in  the  Articles  of  Confedera- 
tion is  clearly  limited  to  duties  on  goods  imported  from  foreign 
States.  Where  ever  we  find  the  grievance  to  be  remedied  by  this 
provision  of  the  Constitution  alluded  to,  the  duty  levied  by  the 
States  on  foreign  importations  is  alone  mentioned,  and  the  advan- 
tages to  accrue  to  Congress  from  the  power  confided  to  it,  and  with- 
held from  the  States,  is  always  mentioned  with  exclusive  reference 
to  foreign  trade. 

Whether  we  look,  then,  to  the  terms  of  the  clause  of  the  Consti- 
tution in  question,  or  to  its  relation  to  the  other  parts  of  that  instru- 
ment, or  to  the  history  of  its  formation  and  adoption,  or  to  the  com- 
ments of  the  eminent  men  who  took  part  in  those  transactions,  we 
are  forced  to  the  conclusion  that  no  intention  existed  to  prohibit,  by 
this  clause,  the  right  of  one  State  to  tax  articles  brought  into  it 
from  another.  If  we  examine  for  a  moment  the  results  of  an  oppo- 
site doctrine,  we  shall  be  well  satisfied  with  the  wisdom  of  the  Con- 
stitution as  thus  construed. 

The  merchant  of  Chicago  who  buys  his  goods  in  New  York  and 


WOODRUFF  V.  PARHAM.  159 

sells  at  wholesale  in  the  original  packages,  may  have  his  millions  em- 
ployed in  trade  for  half  a  life  time  and  escape  all  State,  county,  and 
city  taxes;  for  all  that  he  is  worth  is  invested  in  goods  which  he 
claims  to  be  protected  as  imports  from  New  York.  Neither  the 
State  nor  the  city  which  protects  his  life  and  property  can  make  him 
contribute  a  dollar  to  support  its  government,  improve  its  thorough- 
fares or  educate  its  children.  The  merchant  in  a  town  in  Massa- 
chusetts, who  deals  only  in  wholesale,  if  he  purchases  his  goods  in 
Xew  York,  is  exempt  from  taxation.  If  his  neighbor  purchases  in 
Boston,  he  must  pay  all  the  taxes  which  Massachusetts  levies  with 
equal  justice  on  the  property  of  all  its  citizens. 

These  cases  are  merely  mentioned  as  illustrations.  But  it  is  ob- 
vious that  if  articles  brought  from  one  State  into  another  are  ex- 
empt from  taxation,  even  under  the  limited  circumstances  laid  down 
in  the  case  'of  Brown  v.  Maryland,  the  grossest  injustice  must  pre- 
vail, and  equality  of  public  burdens  in  all  our  large  cities  is  impossi- 
ble. 

It  is  said,  however,  that,  as  a  court,  we  are  bound,  by  our  former 
decisions,  to  a  contrary  doctrine,  and  we  are  referred  to  the  cases 
of  Almy  v.  State  of  California  and  Brown  v.  Maryland,  in  support 
of  the  assertion. 

The  case  first  mentioned  arose  under  a  statute  of  California,  which 
imposed  a  stamp  tax  on  bills  of  lading  for  the  transportation  of  gold 
and  silver  from  any  point  within  the  State  to  any  point  without  the 
State. 

The  master  of  the  ship  Rattler  was  fined  for  violating  this  law,  by 
refusing  to  affix  a  stamp  to  a  bill  of  lading  for  gold  shipped  on 
board  his  vessel  from  San  Francisco  to  New  York.  It  seems  to  have 
escaped  the  attention  of  counsel  on  both  sides,  and  of  the  Chief  Jus- 
tice who  delivered  the  opinion,  that  the  case  was  one  of  inter-state  com- 
merce. No  distinction  of  the  kind  is  taken  by  counsel,  none  alluded 
to  by  the  court,  except  in  the  incidental  statement  of  the  termini  of 
the  voyage.  In  the  language  of  the  court,  citing  Brown  v.  Mary- 
land, as  governing  the  case,  the  statute  of  Maryland  is  described  as 
a  tax  on  foreign  articles  and  commodities.  The  only  question  dis- 
cussed by  the  court  is,  whether  the  bill  of  lading  was  so  intimately 
connected  with  the  articles  of  export  described  in  it  that  a  tax  on  it 
was  a  tax  on  the  articles  exported.  And,  in  arguing  this  proposi- 
tion, the  Chief  Justice  says  that  "a  bill  of  lading,  or  some  equivalent 
instrument  of  writing,  is  invariably  associated  with  every  cargo  of 
merchandise  exported  to  a  foreign  country,  and  consequently  a  duty 
upon  that  is,  in  substance  and  effect,  a  duty  on  the  article  exported." 


160  LIMITATIONS  OF  THE  TAXING  POWER. 

It  is  impossible  to  examine  the  opinion  without  perceiving  that  the 
mind  of  the  writer  was  exclusively  directed  to  foreign  commerce,  and 
there  is  no  reason  to  suppose  that  the  question  which  we  have  dis- 
cussed was  in  his  thought.  We  take  it  to  be  a  sound  principle,  that 
no  proposition  of  law  can  be  said  to  be  overruled  by  a  court,  which 
was  not  in  the  mind  of  the  court  when  the  decision  was  made.  (The 
Victory,  6  Wallace,  382.) 

The  case,  however,  was  well  decided  on  the  ground  taken  by  Mr. 
Blair,  counsel  for  defendant,  namely:  that  such  a  tax  was  a  regula- 
tion of  commerce,  a  tax  imposed  upon  the  transportation  of  goods 
from  one  State  to  another,  over  the  high  seas,  in  conflict  with  that 
freedom  of  transit  of  goods  and  persons  between  one  State  and  an- 
other, which  is  within  the  rule  laid  down  in  Crandall  v.  Nevada, 
(Ib.  35,)  and  with  the  authority  of  Congress  to  regulate  commerce 
among  the  States.  We  do  not  regard  it,  therefore,  as  opposing  the 
views  which  we  have  announced  in  this  case. 

The  case  of  Brown  v.  Maryland,  as  we  have  already  said,  arose 
out  of  a  statute  of  that  State,  taxing,  by  way  of  discrimination,  im- 
porters who  sold,  by  wholesale,  foreign  goods. 

Chief  Justice  Marshall,  in  delivering  the  opinion  of  the  court,  dis- 
tinctly bases  the  invalidity  of  the  statute,  (1)  On  the  clause  of  the 
Constitution  which  forbids  a  State  to  levy  imposts  or  duties  on  im- 
ports; and  (2).  That  which  confers  on  Congress  the  power  to  regu- 
late commerce  with  foreign  nations,  among  the  States,  and  with  the 
Indian  tribes. 

The  casual  remark,  therefore,  made  in  the  close  of  the  opinion, 
"that  we  suppose  the  principles  laid  down  in  this  case  to  ap- 
ply equally  to  importations  from  a  sister  State,"  can  only  be  received 
as  an  intimation  of  what  they  might  decide  if  the  case  ever  came 
before  them,  for  no  such  case  was  then  to  be  decided.  It  is  not,  there- 
fore a  judicial  decision  of  the  question,  even  if  the  remark  was  in- 
tended to  apply  to  the  first  of  the  grounds  on  which  that  decision 
was  placed. 

But  the  opinion  in  that  case  discusses,  as  we  have  said,  under  two 
distinct  heads,  the  two  clauses  of  the  Constitution  which  he  supposed 
to  be  violated  by  the  Maryland  statute,  and  the  remark  above  quoted 
follows  immediately  the  discussion  of  the  second  proposition,  or  the 
applicability  of  the  commerce  clause  to  that  case. 

If  the  court  then  meant  to  say  that  a  tax  levied  on  goods  from  a 
sister  State  which  was  not  levied  on  goods  of  a  similar  character  pro- 
duced within  the  State,  would  be  in  conflict  with  the  clause  of  the 
Constitution  giving  Congress  the  right  "to  regulate  commerce  among 


WOODRUFF  V.  PARHAM.  161 

the  States,"  as  much  as  the  tax  on  foreign  goods,  then  under  con- 
sideration, was  in  conflict  with  the  authority  "to  regulate  commerce 
with  foreign  nations,"  we  agree  to  the  proposition. 

It  may  not  be  inappropriate  here  to  refer  to  the  License  Cases,  (5 
Howard,  504.) 

The  separate  and  diverse  opinions  delivered  by  the  judges  on  that 
occasion  leave  it  very  doubtful  if  any  material  proposition  was  de- 
cided, though  the  precise  point  we  have  here  argued  was  before  the 
court  and  seemed  to  require  solution.  But  no  one  can  read  the 
opinions  which  were  delivered  without  perceiving  that  none  of  them 
held  that  goods  imported  from  one  State  into  another  are  within  the 
prohibition  to  the  States  to  levy  taxes  on  imports,  and  the  language 
of  the  Chief  Justice  and  Judge  McLean  leave  no  doubt  that  their 
views  are  adverse  to  the  proposition. 

We  are  satisfied  that  the  question,  as  a  distinct  proposition  neces- 
sary to  be  decided,  is  before  the  court  now  for  the  first  time. 

But,  we  may  be  asked,  is  there  no  limit  to  the  power  of  the  States 
to  tax  the  produce  of  their  sister  States  brought  within  their  bor- 
ders? And  can  they  so  tax  them  as  to  drive  them  out  or  altogether 
prevent  their  introduction  or  their  transit  over  their  territory? 

The  case  before  us  is  a  simple  tax  on  sales  of  merchandise,  im- 
posed alike  upon  all  sales  made  in  Mobile,  whether  the  sales  be  made 
by  a  citizen  of  Alabama  or  of  another  State,  and  whether  the  goods 
sold  are  the  produce  of  that  State  or  some  other.  There  is  no  at- 
tempt to  discriminate  injuriously  against  the  products  of  other 
States  or  the  rights  of  their  citizens,  and  the  case  is  not,  therefore, 
an  attempt  to  fetter  commerce  among  the  States,  or  to  deprive  the 
citizens  of  other  States  of  any  privilege  or  immunity  possessed  by 
citizens  of  Alabama.  But  a  law  having  such  operation  would,  in  our 
opinion,  be  an  infringement  of  the  provisions  of  the  Constitution 
which  relate  to  those  subjects,  and  therefore  void.  There  is  also,  in 
addition  to  the  restraints  which  those  provisions  impose  by  their  own 
force  on  the  States,  the  unquestioned  power  of  Congress,  under  the 
authority  to  regulate  commerce  among  the  States,  to  interpose,  by 
the  exercise  of  this  power,  in  such  a  manner  as  to  prevent  the  States 
from  any  oppressive  interference  with  the  free  interchange  of  com- 
modities by  the  citizens  of  one  State  with  those  of  another. 

Judgment,  affirmed. 

Mr.  Justice  NELSON,  dissenting. 


11 


162  LIMITATIONS  OF  THE  TAXING  POWER. 


PEOPLE  V.  COMPAGNIE  GENERALE  TRANSATLANTIQUE. 

Supreme  Court  of  the  United  States.     October,  1882 
107  United  States,  59. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 

This  was  an  action  commenced  by  the  People  of  the  State  of  New 
York,  in  the  Court  of  Common  Pleas  for  the  City  and  County  of 
New  York,  to  recover  of  the  defendant  the  sum  of  one  dollar  for  each 
alien  passenger  brought  into  New  York  by  its  vessels,  for  whom  a  tax 
had  not  been  paid,  with  penalties  and  interest.  The  case  was  re- 
moved into  the  Circuit  Court  of  the  United  States,  which,  on  de- 
murrer to  the  complaint,  rendered  a  judgment  in  favor  of  the  de- 
fendant. The  plaintiff  then  brought  this  writ  of  error. 

The  tax  in  this  case  is  demanded  under  sect.  1  of  a  statute  of 
New  York,  passed  May  31,  1881,  entitled  "An  act  to  raise  money  for 
the  execution  of  the  inspection  laws  of  the  State  of  New  York."  The 
section  thus  reads: — 

"Sect.  1.  There  shall  be  levied  and  collected  a  duty  of  one  dollar 
for  each  and  every  alien  passenger  who  shall  come  by  vessel  from 
a  foreign  port  to  the  port  of  New  York  for  whom  a  tax  has  not  here- 
tofore been  paid,  the  same  to  be  paid  to  the  chamberlain  of  the  City 
of  New  York  by  the  master,  owner,  agent,  or  consignee  of  every 
such  vessel  within  twenty-four  hours  after  the  entry  thereof  into  the 
port  of  New  York." 

It  has  been  so  repeatedly  decided  by  this  court  that  such  a  tax  as 
this  is  a  regulation  of  commerce  with  foreign  nations,  confided  by 
the  Constitution  to  the  exclusive  control  of  Congress,  and  this  court 
has  so  recently  considered  the  whole  subject  in  regard  to  similar  stat- 
utes of  the  States  of  New  York,  Louisiana,  and  California,  that  un- 
les^s  we  are  prepared  to  reverse  our  decisions  and  the  principles  on 
which  they  are  based,  in  the  cases  of  Henderson  v.  Mayor  of  New 
York  and  Chy  Lung  v.  Freeman,  92  U.  S.  259,  275,  there  is  little  to 
say  beyond  affirming  the  judgment  of  the  Circuit  Court,  which  was 
based  on  those  decisions. 

The  argument  mainly  relied  on  in  the  present  case  is  that  the  new 
statute  of  New  York,  passed  after  her  former  statutes  had  been  de- 
clared void  in  Passenger  Cases,  7  How.  283,  and  in  the  recent  case  of 
Henderson  v.  Mayor  of  New  York,  is  in  aid  of  the  inspection  laws 
of  the  State.  This  argument  is  supposed  to  derive  support  from  an- 
other statute  passed  three  days  earlier,  entitled  "An  Act  for  the  in- 


PEOPLE  V.  COMPAGXIE  TRAXSATLAXT1QUE.       163 

spection  of  alien  emigrants  and  their  effects  by  the  commissioners  of 
emigration." 

This  act  empowers  and  directs  the  commissioners  of  emigration 
"to  inspect  the  persons  and  effects  of  all  persons  arriving  by  vessel 
at  the  port  of  Xew  York  from  any  foreign  country,  as  far  as  may  be 
necessary,  to  ascertain  who  among  them  are  habitual  criminals,  or 
pauper  lunatics,  idiots,  or  imbeciles,  or  deaf,  dumb,  blind,  infirm,  or 
orphan  persons,  without  means  or  capacity  to  support  themselves  and 
subject  to  become  a  public  charge,  and  whether  their  persons  or 
effects  are  affected  with  any  infectious  or  contagious  disease,  and 
whether  their  effects  contain  any  criminal  implements  or  contriv- 


ances. 


We  feel  safe  in  saying  that  neither  at  the  time  of  the  formation 
of  the  Constitution  nor  since  has  any  inspection  law  included  any- 
thing but  personal  property  as  a  subject  of  its  operation.  Nor  has 
it  ever  been  held  that  the  words  "imports  and  exports"  are  used  in 
that  instrument  as  applicable  to  free  human  beings  by  any  com- 
petent judicial  authority. 

We  know  of  nothing  which  can  be  exported  from  one  country  or 
imported  into  another  that  is  not  in  some  sense  property, — property 
in  regard  to  which  some  one  is  owner,  and  is  either  the  importer 
or  the  exporter. 

This  cannot  apply  to  a  free  man.  Of  him  it  is  never  said  he  im- 
ports himself,  or  his  wife  or  his  children. 

The  language  of  sect.  9,  art.  1,  of  the  Constitution,  which  is 
relied  on  by  counsel,  does  not  establish  a  different  construction: 
"The  migration  or  importation  of  such  persons  as  any  of  the  States 
now  existing  shall  think  proper  to  admit,  shall  not  be  prohibited  by 
Congress  prior  to  the  year  one  thousand  eight  hundred  and  eight, 
but  a  tax  or  duty  may  be  imposed  on  such  importation,  not  exceed- 
ing ten  dollars  for  each  person." 

There  has  never  been  any  doubt  that  this  clause  had  exclusive  ref- 
erence to  persons  of  the  African  Race.  The  two  words  "migration" 
and  "importation"  refer  to  the  different  conditions  of  this  race  as 
regards  freedom  and  slavery.  When  the  free  black  man  came  here, 
he  migrated;  when  the  slave  came,  he  was  imported.  The  latter 
was  property,  and  was  imported  by  his  owner  as  other  property,  and 
a  duty  could  be  imposed  on  him  as  an  import.  We  conclude  that 
free  human  beings  are  not  imports  or  exports,  within  the  meaning 
of  the  Constitution. 

In  addition  to  what  is  said  above,  it  is  apparent  that  the  object  of 


164  LIMITATIONS  OF  THE  TAXING  POWER. 

these  New  York  enactments  goes  far  beyond  any  correct  view  of 
the  purpose  of  an  inspection  law.  The  commissioners  are  "to  in- 
spect all  persons  arriving  from  any  foreign  country  to  ascertain 
who  among  them  are  habitual  criminals,  or  pauper  lunatics,  idiots,, 

or   imbeciles, or   orphan   persons,   without  means  or 

capacity  to  support  themselves  and  subject  to  become  a  public 
charge." 

It  may  safely  be  said  that  these  are  matters  incapable  of  being 
satisfactorily  ascertained  by  inspection. 

What  is  an  inspection?  Something  which  can  be  accomplished  by 
looking  at  or  weighing  or  measuring  the  thing  to  be  inspected,  or 
applying  to  it  at  once  some  crucial  test.  When  testimony  or  evi- 
dence is  to  be  taken  and  examined,  it  is  not  inspection  in  any  sense 
whatever. 

Another  section  provides  for  the  custody,  the  support,  and  the 
treatment  for  disease  of  these  persons,  and  the  retransportation  of 
criminals.  Are  these  inspection  laws?  Is  the  ascertainment  of  the 
guilt  of  a  crime  to  be  made  by  inspection? 

In  fact,  these  statutes  differ  from  those  heretofore  held  void  only 
in  calling  them  in  their  caption  "inspection  laws,'*  and  in  providing 
for  payment  of  any  surplus,  after  the  support  of  paupers,  criminals 
and  diseased  persons,  into  the  treasury  of  the  United  States, — a  sur- 
plus which,  in  this  enlarged  view  of  what  are  the  expenses  of  an 
inspection  law,  it  is  safe  to  say  will  never  exist. 

A  State  cannot  make  a  law  designed  to  raise  money  to  support 
paupers,  to  detect  or  prevent  crime,  to  guard  against  disease,  and 
to  cure  the  sick,  an  inspection  law,  within  the  constitutional  mean- 
ing of  that  word,  by  calling  it  so  in  the  title. 

Since  the  decision  of  this  case  in  the  Circuit  Court,  Congress  has 
undertaken  to  do  what  this  court  has  repeatedly  said  it  alone  had 
the  power  to  do.  By  the  Act  of  August  3,  1882,  c.  376,  entitled  "An 
Act  to  regulate  immigration,"  a  duty  of  fifty  cents  is  to  be  collected 
for  every  passenger  not  a  citizen  of  the  United  States  who  shall  come 
to  any  port  within  the  United  States  by  steam  or  sail  vessel  from  a 
foreign  country,  from  the  master  of  said  vessel  by  the  collector  of 
customs.  The  money  so  collected  is  to  be  paid  into  the  treasury  of 
the  United  States,  and  to  constitute  a  fund  to  be  called  the  immi- 
grant fund,  for  the  care  of  immigrants  arriving  in  the  United 
States,  and  the  relief  of  such  as  are  in  distress.  The  Secretary  of 
the  Treasury  is  charged  with  the  duty  of  executing  the  provisions 
of  the  act  and  with  supervision  over  the  business  of  immigration. 
No  more  of  the  fund  so  raised  is  to  be  expended  in  any  port  than 


STATE  TONNAGE  TAX  CASES.  165 

is  collected  there.     This  legislation  covers  the  same  ground  as  the 
New  York  statute,  and  they  cannot  co-exist. 

Judgment  affirmed. 


8.     Tonnage  Taxes. 

STATE  TONNAGE  TAX  CASES. 

Supreme  Court  of  the  United  States.     December,  1870. 
12  Wallace,  204. 

Mr.  Justice  CLIFFORD  delivered  the  judgment  of  the  court,  giv- 
ing an  opinion  in  each  of  the  cases. 

I.    IN  THE  FIRST  CASE. 

Assumpsit  for  money  had  and  received  is  an  appropriate  remedy 
to  recover  back  moneys  illegally  exacted  by  a  collector  as  taxes  in 
all  jurisdictions  where  no  other  remedy  is  given,  unless  the  tax  was 
voluntarily  paid  or  some  statutory  conditions  are  annexed  to  the  ex- 
ercise of  the  right  to  sue,  which  were  unknown  at  common  law. 

Where  the  party  assessed  voluntarily  pays  the  tax  he  is  without 
remedy  in  such  an  action,  but  if  the  tax  is  illegal  or  was  erroneously 
assessed,  and  he  paid  it  by  compulsion  of  law  or  under  protest,  or 
with  notice  that  he  intends  to  institute  a  suit  to  test  the  validity  of 
the  tax,  he  may  recover  it  back  in  such  an  action,  unless  the  legisla- 
tive authority,  in  the  jurisdiction  where  the  tax  was  levied,  has  pre- 
scribed some  other  remedy  or  has  annexed  some  other  conditions  to 
the  exercise  of  the  right  to  institute  such  a  suit.  (Elliott  v.  Swar- 
tout,  10  Peters,  150;  Bend  v.  Hoyt,  13  id.,  267.) 

On  the  twenty-second  of  February,  1866,  the  legislature  of  Ala- 
bama passed  a  revenue  act,  and  therein,  among  other  things,  levied 
a  tax  "on  all  steamboats,  vessels,  and  other  water-crafts  plying  in 
the  navigable  waters  of  the  State,  at  the  rate  of  one  dollar  per  ton 
of  the  registered  tonnage  thereof,"  to  be  assessed  and  collected  at  the 
port  where  such  vessels  are  registered,  if  practicable,  otherwise  at 
any  other  port  or  landing  within  the  State  where  such  vessel  may 
be."  (Sess.  Acts  1846,  p.  7.) 

Five  steamboats  were  owned  by  the  plaintiffs,  who  were  citizens  of 
that  State,  doing  business  at  Mobile  under  the  firm  name  set  forth 
in  the  record.  All  of  the  steamboats  were  duly  enrolled  and  licensed 
in  conformity  to  the  act  of  Congress  entitled  "An  act  for  enrolling 
and  licensing  ships  and  vessels  to  be  employed  in  the  coasting  trade 


166  LIMITATIONS  OF  THE  TAXING  POWER. 

of  the  United  States,"  and  the  record  shows  that  at  the  time  the 
taxes,  which  are  the  subject  of  controversy,  were  imposed  and  col- 
lected, all  those  steamboats  were  engaged  in  the  navigation  of  the 
Alabama,  Bigbee,  and  Mobile  Rivers,  in  the  transportation  of  freight 
and  passengers  between  the  port  of  Mobile  and  other  towns  and  land- 
ings on  said  rivers,  within  the  limits  of  the  State,  the  said  rivers 
being  "waters  navigable  from  the  sea  by  vessels  of  ten  or  more  tons 
burden."  (1  Stat.  at  Large,  77.) 

Such  steamboats  are  deemed  ships  and  vessels  of  the  United 
States,  and  as  such  are  entitled  to  the  privileges  secured  to  such 
ships  and  vessels  by  the  act  of  Congress  providing  for  enrolling  and 
licensing  ships  and  vessels  to  be  employed  in  that  trade.  (Ib.  305-.) 

Demand  of  the  taxes  having  been  made  by  the  collector,  the  plain- 
tiffs protested  that  the  same  were  illegal,  but  they  ultimately  paid 
the  same  to  prevent  the  collector  from  seizing  the  steamboats  and 
selling  the  same  in  case  they  refused  to  pay  the  amount.  They  paid 
the  sum  of  two  thousand  eight  hundred  and  forty-eight  dollars  and 
twenty-five  cents  as  the  amount  of  the  taxes,  fees,  and  expenses  de- 
manded by  the  defendant,  and  brought  an  action  of  assumpsit 
against  the  collector  in  the  Circuit  Court  of  the  State  for  Mobile 
County  to  recover  back  the  amount,  upon  the  ground  that  the  sum 
was  illegally  exacted.  Judgment  was  rendered  in  that  court  for  the 
plaintiffs,  the  court  deciding  that  the  taxes  were  illegal,  as  having 
been  levied  in  violation  of  the  Federal  Constitution.  Appeal  was 
taken  by  the  defendant  to  the  Supreme  Court  of  the  State,  where  the 
parties  were  again  heard,  but  the  Supreme  Court  of  the  State,  differ- 
ing in  opinion  from  the  Circuit  Court  where  the  suit  was  com- 
menced, rendered  judgment  for  the  defendant,  whereupon  the  plain- 
tiffs sued  out  a  writ  of  error  and  removed  the  record  into  this  court 
for  re-examination. 

I.  Two  principal  objections  were  made  to  the  taxes  by  the 
plaintiffs,  as  appears  by  the  agreed  statement,  which  is  made  a  part 
of  the  record.  (1)  That  the  taxes  as  levied  and  collected  were  in 
direct  contravention  of  the  prohibition  of  the  Constitution,  that  "no 
State  shall,  without  the  consent  of  Congress,  levy  any  duty  of  ton- 
nage," and  the  proposition  of  the  plaintiffs  was  and  still  is  that  the 
act  of  the  legislature  of  the  State  directs  in  express  terms  that  such 
taxes  shall  be  levied  on  all  steamboats,  vessels,  and  other  water-crafts 
plying  in  the  navigable  waters  of  the  State.  (2)  That  the  State  law 
by  levying  the  taxes  violates  the  compact  between  the  State  and  the 
United  States,  that  "all  navigable  waters  within  the  said  State  shall 


STATE  TONNAGE  TAX  CASES.  161 

forever  remain  public  highways,  free  to  the  citizens  of  the  said  State 
and  of  the  United  States,  without  any  tax,  duty,  impost,  or  toll 
therefor  imposed  by  the  said  State.''  (3  Stat.  at  Large,  492.) 

1.  Congress  has  prescribed  the  rules  of  admeasurement  and  com- 
putation for  estimating  the  tonnage  of  American  ships  and  vessels. 
(13  Id.  70;  Ib.  444.) 

Viewed  in  the  light  of  those  enactments,  the  word  tonnage,  as  ap- 
plied to  American  ships  and  vessels,  must  be  held  to  mean  their 
entire  internal  cubical  capacity,  or  contents  of  the  ship  or  vessel  ex- 
pressed in  tons  of  one  one  hundred  cubical  feet  each,  as  estimated  and 
ascertained  by  those  rules  of  admeasurement  and  of  computation. 
(Alexander  v.  Railroad,  3  Strohbart,  598.) 

Taxes  levied  by  a  State  upon  ships  and  vessels. owned  by  the  citi- 
zens of  the  State  as  property,  based  on  a  valuation  of  the  same  as 
property,  are  not  within  the  prohibition  of  the  Constitution,  but  it 
is  equally  clear  and  undeniable  that  taxes  levied  by  a  State  upon 
ships  and  vessels  as  instruments  of  commerce  and  navigation  are 
within  that  clause  of  the  instrument  which  prohibits  the  States  from 
levying  any  duty  of  tonnage,  without  the  consent  of  Congress;  and 
it  makes  no  difference  whether  the  ships  or  vessels  taxed  belong  to 
the  citizens  of  the  State  which  levies  the  tax  or  the  citizens  of  an- 
other State,  as  the  prohibition  is  general,  withdrawing  altogether 
from  the  States  the  power  to  lay  any  duty  of  tonnage  under  any 
circumstances,  without  the  consent  of  Congress.  (Gibbons  v.  Ogden, 
9  Wheaton,  202;  Sinnot  v.  Davenport,  22  Howard,  238;  Foster  v. 
Davenport,  Ib.  245;  Perry  v.  Torrence,  8  Ohio,  524.) 

Annual  taxes  upon  property  in  ships  and  vessels  are  continually 
laid,  and  their  validity  was  never  doubted  or  called  in  question,  but 
if  the  States,  without  the  consent  of  Congress,  tax  shipe  or  vessel^ 
as  instruments  of  commerce,  by  a  tonnage  duty,  or  indirectly  by  im- 
posing the  tax  upon  the  master  or  crew,  they  assume  a  jurisdiction 
which  they  do  not  possess,  as  every  such  act  falls  directly  within  the 
prohibition  of  the  Constitution.  (Passenger  Cases,  7  Howard,  447, 
481.) 

Tonnage  duties  are  as  much  taxes  as  duties  on  imports  or  ex- 
ports, and  the  prohibition  of  the  Constitution  extends  as  fully  to 
such  duties  if  levied  by  the  States  as  to  duties  on  imports  or  ex- 
ports, and  for  reasons  quite  as  strong  as  those  which  induced  the 
framers  of  the  Constitution  to  withdraw  imports  and  exports  from 
State  taxation.  Measures,  however,  scarcely  distinguishable  from 


168  LIMITATIONS  OF  THE  TAXING  POWER. 

each  other  may  flow  from  distinct  grants  of  power,  as  for  example, 
Congress  does  not  possess  the  power  to  regulate  the  purely  internal 
commerce  of  the  States,  but  Congress  may  enroll  and  license  ships 
and  vessels  to  sail  from  one  port  to  another  in  the  same  State,  and 
it  is  clear  that  such  ships  and  vessels  are  deemed  ships  and  vessels  of 
the  United  States,  and  that  as  such  they  are  entitled  to  the  privileges 
of  ships  and  vessels  employed  in  the  coasting  trade,  (1  Stat.  at 
Large,  287;  Ib.  305;  3  Kent,  llth  ed.  203.) 

Ships  and  vessels  enrolled  and  licensed  under  that  act  are  author- 
ized to  carry  on  the  coasting  trade,  as  the  act  contains  a  positive  en- 
actment that  the  ships  and  vessels  it  describes,  and  no  others,  shall 
be  deemed  ships  or  vessels  of  the  United  States  entitled  to  the  privi- 
leges of  ships  and  vessels  employed  in  the  trade  therein  described. 
(Gibbons  v.  Ogden  9  Wheaton,  212.) 

Steamboats,  as  well  as  sailing  ships  and  vessels,  are  required  to  be 
enrolled  and  licensed  for  the  coasting  trade,  and  the  record  shows 
that  all  the  steamboats  taxed  in  this  case  had  conformed  to  all  the 
regulations  of  Congress  in  that  regard,  that  they  were  duly  enrolled 
and  licensed  for  the  coasting  trade  and  were  engaged  in  the  trans- 
portation of  passengers  and  freight  within  the  limits  of  the  State, 
upon  waters  navigable  from  the  sea  by  vessels  of  ten  or  more  tons 
burden. 

Tonnage  duties,  to  a  greater  or  less  extent,  have  been  imposed  by 
Congress  ever  since  the  Federal  government  was  organized  under  the 
Constitution  to  the  present  time.  They  have  usually  been  exacted 
when  the  ship  or  vessel  entered  the  port,  and  have  been  collected  in 
a  manner  not  substantially  different  from  that  prescribed  in  the 
act  of  the  State  legislature  under  consideration.  Undisputed  author- 
ity exists  in  Congress  to  impose  such  duties,  and  it  is  not  pretended 
that  any  consent  has  ever  been  given  by  Congress  to  the  State  to 
exercise  any  such  power. 

If  the  tax  levied  is  a  duty  of  tonnage,  it  is  conceded  that  it  i-< 
illegal,  and  it  is  difficult  to  see  how  the  concession  could  be  avoided, 
as  the  prohibition  is  express,  but  the  attempt  is  made  to  show  that 
the  legislature  in  enacting  the  law  imposing  the  tax,  merely  referred 
to  the  registered  tonnage  of  the  steamboats  "as  a  way  or  mode  to 
determine  and  ascertain  the  tax  to  be  assessed  on  the  steamboats, 
and  to  furnish  a  rule  or  rate  to  govern  the  assessors  in  the  perform- 
ance of  their  duties." 

Suppose  that  could  be  admitted,  it  would  not  have  much  tendency 
to  strengthen  the  argument  for  the  defendant,  as  the  suggestion  con- 


STATE  TONNAGE  TAX  CASES.  Kii) 

cedes  what  is  obvious  from  the  schedule,  that  the  taxes  are  levied 
without  regard  to  the  value  of  the  steamboats.  But  the  proposition 
involved  in  the  suggestion  cannot  be  admitted,  as  by  the  very  terms 
of  the  act,  the  tax  is  levied  on  the  steamboats  wholly  irrespective  of 
the  value  of  the  vessels  as  property,  and  solely  and  exclusively  on 
the  basis  of  their  cubical  contents  as  ascertained  by  the  rules  of  ad- 
measurement and  computation  prescribed  by  the  act  of  Congress. 

Legislative  enactments,  where  the  language  is  unambiguous,  cannot 
l>e  changed  by  construction,  nor  can  the  language  be  divested  of  its 
plain  and  obvious  meaning.  Taxes  levied  under  an  enactment  which 
directs  that  a  tax  shall  be  imposed  on  steamboats  at  the  rate  of  one 
dollar  per  ton  of  the  registered  tonnage  thereof,  and  that  the  same 
shall  be  assessed  and  collected  at  the  port  where  such  steamboats  are 
registered,  cannot,  in  the  judgment  of  this  court,  be  held  to  be  a 
tax  on  the  steamboat  as  property.  On  the  contrary  the  tax  is  just 
what  the  language  imports,  a  duty  of  tonnage,  which  is  made  even 
plainer  when  it  comes  to  be  considered  that  the  steamboats  are  not 
to  be  taxed  at  all  unless  they  are  "plying  in  the  navigable  waters  of 
the  State,"  showing  to  a  demonstration  that  it  is  as  instruments  \)f 
commerce  and  not  as  property  that  they  are  required  to  contribute 
to  the  revenues  of  the  State. 

Such  provision  is  much  more  clearly  within  the  prohibition  in  ques- 
tion than  the  one  involved  in  a  recent  case  decided  by  this  court,  in 
which  it  was  held  that  a  statute  of  a  State  enacting  that  the  ward- 
ens of  a  port  were  entitled  to  demand  and  receive,  in  addition  to 
other  fees,  the  sum  of  five  dollars  for  every  vessel  arriving  at  the 
port,  whether  called  on  to  perform  any  service  or  not,  was  both  a 
regulation  of  commerce  and  a  duty  of  tonnage,  and  that  as  such  it 
was  unconstitutional  and  void.  (Steamship  Co.  v.  Port  Wardens,  6 
Wallace,  34.) 

Speaking  of  the  same  prohibition,  the  Chief  Justice  said  in  that 
case  that  those  words  in  their  most  obvious  and  general  sense  de- 
scribe a  duty  proportioned  to  the  tonnage  of  the  vessel — a  certain 
rate  on  each  ton — which  is  exactly  what  is  directed  by  the  provision 
in  the  tax  act  before  the  court,  but  he  added  that  it  seems  plain,  if 
the  Constitution  be  taken  in  that  restricted  sense,  it  would  not  fully 
accomplish  the  intent  of  the  framers,  as  the  prohibition  upon  the 
States  against  levying  duties  on  imports  or  exports  would  be  in- 
effectual if  it  did  not  also  extend  to  duties  on  the  ships  which  serve 
as  the  vehicles  of  conveyance,  which  was  doubtless  intended  by  the- 
prohibition  of  any  duty  of  tonnage.  "It  was  not  only  a  pro  rata  tax 
which  was  prohibited,  but  any  duty  on  the  ship,  whether  a  fixed 


170  LIMITATIONS  OF  THE  TAXING  POWER. 

sum  upon  its  whole  tonnage,  or  a  sum  to  be  ascertained  by  com- 
paring the  amount  of  tonnage  with  the  rate  of  duty." 

Assume  the  rule  to  be  as  there  laid  down  and  all  must  agree  that 
"the  levy  of  the  tax  in  question  is  expressly  prohibited,  as  the  sched- 
ule shows  that  it  is  exactly  proportioned  to  the  registered  tonnage  of 
the  steamboats  plying  in  the  navigable  waters  of  the  State." 

Strong  as  the  language  of  the  Chief  Justice  is  in  that  case,  it  is 
no  stronger  than  the  language  employed  by  the  Supreme  Court  of 
the  State  to  which  this  writ  of  error  was  addressed  in  the  case  of 
Sheffield  v.  Parsons,  (3  Stewart  &  Porter,  304),  in  which  the  court 
in  effect  says  that  no  tax,  custom,  or  toll,  can  be  levied  "on  the  ton- 
nage of  any  vessel,  without  the  consent  of  Congress,  for  any  pur- 
pose." Precisely  the  same  rule  was  applied  by  that  court  to  vessels 
duly  enrolled  and  licensed  for  the  coasting  trade,  and  which  were 
exclusively  engaged  in  the  towage  and  lighterage  business  in  the  bay 
and  harbor  of  Mobile,  carrying  passengers  and  freight  between  the 
city  and  vessels  at  the  anchorage  below  the  bar.  (Lott  v.  Morgan, 
41  Alabama,  250.) 

Some  stress  was  laid  in  that  case  upon  the  circumstance  that  the 
vessels  taxed  were  engaged  in  transporting  cargoes  to  and  from  ves- 
sels engaged  in  foreign  commerce,  bound  to  that  port,  but  it  is  quite 
clear  that  that  circumstance  is  entitled  to  no  weight,  as  the  prohibi- 
tion extends  to  all  ships  and  vessels  entitled  to  the  privileges  of  ships 
and  vessels  employed  in  the  coasting  trade,  whether  employed  in 
commercial  intercourse  between  ports  in  different  States  or  between 
different  ports  in  the  same  State.  (People  v.  Saratoga  &  Rensselaer 
Railroad  Company,  15  Wendell,  131;  Steamboat  Company  v.  Liv- 
ingston, 3  Cowen,  743.) 

Formerly  harbor-masters,  at  the  port  of  Charleston,  by  an  ordi- 
nance of  that  city,  might  exact  one  cent  per  ton,  once  in  every  three 
months,  of  every  steam  packet  or  other  vessel  from  certain  adjoining 
States  trading  steadily  there  and  performing  regular  successive  voy- 
ages to  that  port,  but  when  the  question  came  to  be  presented  to 
the  Court  of  Errors  of  that  State,  the  judges  unanimously  held  that 
the  exaction  was  a  duty  on  tonnage,  and  that,  as  such,  the  provision 
was  unconstitutional  and  void.  (Alexander  v.  Railroad,  3  Strohbart, 
598.) 

Taxes  in  aid  of  the  inspection  laws  of  a  State,  under  special  cir- 
cumstances, have  been  upheld  as  necessary  to  promote  the  interests 
of  commerce  and  the  security  of  navigation.  (Cooley  v.  Port  Ward- 
ens, 12  How.  314.) 

Laws  of  that  character  are  upheld  as  contemplating  benefits  and 


STATE  TOXXA(JE  TAX- CASES.  171 

advantages  to  commerce  and  navigation,  and  as  altogether  distinct 
from  imposts  and  duties  on  imports  and  exports  and  duties  of  ton- 
nage. Usage,  it  is  said,  has  sanctioned  such  laws  where  Congress 
has  not  legislated,  but  it  is  clear  that  such  laws  bear  no  relation  to 
the  act  in  question,  as  the  act  under  consideration  is  emphatically 
an  act  to  raise  revenue  to  replenish  the  treasury  of  the  State  and 
for  no  other  purpose,  and  does  not  contemplate  any  beneficial  ser- 
vice for  the  steamboats  or  other  vessels  subjected  to  taxation. 

Beyond  question  the  act  is  an  act  to  raise  revenue  without  any 
corresponding  or  equivalent  benefit  or  advantage  to  the  vessels  taxed 
or  to  the  shipowners,  and  consequently  it  cannot  be  upheld  by  virtue 
of  the  rules  applied  to  the  construction  of  laws  regulating  pilot  dues 
and  port  charges.  (State  v.  Charleston,  4  Rich.  S.  C.  286;  Benedict 
v.  Vanderbilt,  I  Robt.  N.  Y.  200.) 

Attempt  was  made  in  the  case  of  Alexander  v.  Railroad,  to  show 
that  the  form  of  levying  the  tax  was  simply  a  mode  of  assessing  ves- 
sels as  property,  but  the  argument  did  not  prevail,  nor  can  it  in  this 
case,  as  the  amount  of  the  tax  is  measured  by  the  tonnage  of  the 
steamboats  and  not  by  their  value  as  property. 

Reference  is  made  to  the  case  of  the  Towboat  Company  v.  Bor- 
delon,  (7  Louisiana  An.  195),  as  asserting  the  opposite  rule,  but  the 
court  is  of  a  different  opinion,  as  the  tax  in  that  case  was  levied, 
not  upon  the  boat  but  upon  the  capital  of  the  company  owning  the 
boat,  and  the  court  in  delivering  their  opinion  say  the  capital  of  the 
company  is  property,  and  the  constitution  of  the  State  requires  an 
equal  and  uniform  tax  to  be  imposed  upon  it  with  the  other  prop- 
erty of  the  State  for  the  support  of  government. 

For  these  reasons  the  court  is  of  opinion  that  the  State  law  levy- 
ing the  taxes  in  this  case  is  unconstitutional  and  void,  that  the  judg- 
ment of  the  State  court  is  erroneous  and  that  it  must  be  reversed, 
and  having  come  to  that  conclusion  the  court  does  not  find  it  neces- 
sary to  determine  the  other  question. 

JUDGMENT  REVERSED  with  costs,  and  the  cause  remanded  for  fur- 
ther proceedings  in  conformity  to  the  opinion  of  the  court. 

II.     IN  THE  SECOND  CASE. 

Much  discussion  of  the  questions  involved  in  this  record  will  not 
be  required,  as  they  are  substantially  the  same  as  those  presented  in 
the  preceding  case,  which  have  already  been  fully  considered  and 
definitely  decided. 

Bills  of  the  taxes,  it  is  alleged  were  rendered  to  the  complainants, 


172  LIMITATIONS  OF  THE  TAXING  POWER. 

but  it  is  not  necessary  to  enter  into  those  details,  except  to  say  that 
the  taxes  were  levied  in  the  same  form  as  in  the  preceding  case,  and 
the  complainants  allege  that  the  respondent  claims  that  he  is  author- 
ized, in  case  they  refuse  to  pay  the  taxes,  to  seize  the  respective 
steamboats,  and  that  he  may  proceed,  after  twenty  days'  notice,  to 
sell  the  same,  or  as  much  thereof  as  will  pay  the  taxes,  expenses  and 
costs.  They,  the  complainants,  deny  the  legality  of  the  taxes,  and 
allege  that  the  respondent,  as  such  collector,  threatens  to  seize  the 
said  steamboats  and  to  proceed  to  sell  the  same  to  pay  the  taxes,  ex- 
penses, and  costs,  which,  they  insist,  would  be  contrary  to  equity. 
Being  without  any  remedy  at  law,  as  they  allege,  they  ask  the  inter- 
position of  a  court  of  equity,  and  allege  that  the  taxes  are  illegal. 

Different  remedies  are  accorded  to  a  complaining  party  in  differ- 
ent jurisdictions  for  grievances  such  as  the  one  set  forth  in  the  bill 
of  complaint  before  the  court.  Usually  preventive  remedies  are  dis- 
countenanced as  embarrassing  to  the  just  operations  of  the  govern- 
ment, and  the  party  taxed  is  required  to  pay  the  tax  and  seek  re- 
dress in  an  action  of  assumpsit  against  the  collector  for  money  had 
and  received.  Decided  cases  may  also  be  referred  to  where  it  is  held 
that  trespass  will  lie  against  the  assessor,  if  it  appear  that  the  whole 
tax  was  levied  without  authority,  as  in  that  state  of  the  case  it  is 
held  that  the  assessor  had  no  jurisdiction  of  the  subject-matter.  Pre- 
ventive remedies,  however,  are  accorded  in  some  of  the  States,  and  in 
cases  brought  here  by  writ  of  error  under  the  twenty-fifth  section  of 
the  Judiciary  Act,  if  no  objection  was  taken  in  the  court  below  to 
the  form  of  the  remedy  employed,  and  none  is  taken  in  this  court, 
it  may  safely  be  assumed  that  the  proceeding  adopted  was  regarded 
in  the  court  below  as  an  appropriate  remedy  for  the  alleged  griev- 
ance. Doubts  upon  that  subject  cannot  be  entertained  in  this  case, 
as  the  record  shows  that  both  courts  heard  and  determined  the  case 
upon  the  merits,  and  all  parties  conceded  throughout  the  litigation 
that  the  complainants  were  entitled  to  the  relief  prayed  for  in  the 
bill  of  complaint,  if  the  taxes  were  illegal,  and  the  law  levying  the 
same  was  unconstitutional  and  void. 

State  authority  to  tax  ships  and  vessels,  it  is  supposed  by  the  re- 
spondent, extends  to  all  cases  where  the  ship  or  vessel  is  not  em- 
ployed in  foreign  commerce  or  in  commerce  between  ports  or  places 
in  different  States.  He  concedes  that  the  States  cannot  levy  a  duty 
of  tonnage  on  ships  or  vessels  if  the  ship  or  vessel  is  employed  in 
foreign  commerce  or  in  commerce  "among  the  States,"  but  he  denies 


FAIRBANK  V.   UNITED   STATES.  173 

that  the  prohibition  extends  to  ships  or  vessels  employed  in  com- 
merce between  ports  and  places  in  the  same  State,  and  that  is  the 
leading  error  in  the  opinion  of  the  Supreme  Court  of  the  State. 
Founded  upon  that  mistake  the  proposition  is  that  all  taxes  are 
taxes  upon  property,  although  levied  upon  ships  and  vessels  duly  en- 
rolled and  licensed,  if  the  ship  or  vessel  is  not  employed  in  foreign 
commerce  or  in  commerce  among  the  States. 

Ships  or  vessels  of  ten  or  more  tons  burden,  duly  enrolled  and 
licensed,  if  engaged  in  commerce  on  waters  which  are  navigable  by 
such  vessels  from  the  sea,  are  ships  and  vessels  of  the  United  States 
entitled  to  the  privileges  secured  to  such  vessels  by  the  act  for  en- 
rolling or  licensing  ships  or  vessels  to  be  employed  in  the  coasting 
trade. 

Such  a  rule  as  that  assumed  by  the  respondent  would  incorporate 
into  the  Constitution  an  exception  which  it  does  not  contain.  Had 
the  prohibition  in  terms  applied  only  to  ships  and  vessels  employed 
in  foreign  commerce  or  in  commerce  among  the  States,  his  construc- 
tion would  be  right,  but  courts  of  justice  cannot  add  any  new  pro- 
vision to  the  fundamental  law,  and,  if  not,  it  seems  clear  to  a  dem- 
onstration that  the  construction  assumed  by  the  respondent  is 
erroneous. 

DECREE  REVERSED  and  the  cause  remanded  for  further  proceedings 
in  conformity  to  the  opinion  of  this  court. 


4.     Taxes  on  Exports. 

FAIRBANK  V.  UNITED  STATES. 

Supreme  Court  of  the  United  States.     April,  1901. 
181  United  States,  283. 

On  March  7,  1900,  plaintiff  in  error  was  convicted  in  the  Dis- 
trict Court  of  the  United  States  for  the  District  of  Minnesota  on  the 
charge  of  issuing  as  agent  of  the  Northern  Pacific  Railway  Company 
an  export  bill  of  lading  upon  certain  wheat  exported  from  Minne- 
sota to  Liverpool,  England,  without  affixing  thereto  an  internal  rev- 
enue stamp,  as  required  by  the  act  of  June  13,  1898,  c.  448,  30 
Stat.  448.  Upon  that  conviction  he  was  sentenced  to  pay  a  fine  of 
$25.  His  contention  on  the  trial  was  that  that  act,  so  far  as  it  im- 
poses a  stamp  tax  on  foreign  bills  of  lading,  is  in  conflict  with  art. 
I,  section  9,  of  the  Constitution  of  the  United  States,  which  reads: 


174  LIMITATIONS  OF  THE  TAXING  POWER. 

"No  tax  or  duty  shall  be  laid  on  articles  exported  from  any  State." 
This  contention  was  not  sustained  by  the  trial  court,  and  this  writ 
of  error  was  sued  out  to  review  the  judgment  solely  upon  the  fore- 
going constitutional  question. 

Mr.  Justice  BREWER,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

I  f  powers  granted  are  to  be  taken  as  broadly  granted  and  as  carry- 
ing with  them  authority  to  pass  those  acts  which  may  be  reasonably 
necessary  to  carry  them  into  full  execution;  in  other  words,  if  the 
Constitution  in  its  grant  of  powers  is  to  be  so  construed  that  Con- 
gress shall  be  able  to  carry  into  full  effect  the  powers  granted,  it  is 
equally  imperative  that  where  prohibition  or  limitation  is  placed 
upon  the  power  of  Congress,  that  prohibition  or  limitation  should  be 
equally  enforced  in  its  spirit  and  to  its  entirety 

The  constitutional  provision  is  "no  tax  or  duty  shall  be  laid  on 
articles  exported  from  any  State."  The  statute  challenged  imposes 
on  "bills  of  lading  for  any  goods,  merchandise  or  effects,  to  be  ex- 
ported from  any  port  or  place,  ten  cents."  The  contention  on  the 
part  of  the  Government  is  that  no  tax  or  duty  is  placed  upon  the 
article  exported;  that  so  far  as  the  question  is  in  respect  to  what 
may  be  exported  and  how  it  should  be  exported,  the  statute,  follow- 
ing the  Constitution,  imposes  no  restriction;  that  the  full  scope  of 
the  legislation  is  to  impose  a  stamp  duty  on  a  document  not  neces- 
sarily though  ordinarily  used  in  connection  with  the  exportation  of 
goods;  that  it  is  a  mere  stamp  imposition  on  an  instrument,  and, 
similar  to  many  such  taxes  as  are  imposed  by  Congress,  by  virtue 
of  its  general  power  of  taxation,  not  upon  this  alone,  but  upon  a 
great  variety  of  instruments  used  in  the  ordinary  transactions  of 
business.  On  the  other  hand,  it  is  insisted  that  though  Congress  by 
virtue  of  its  general  taxing  power  may  impose  stamp  duties  on  the 
great  bulk  of  instruments  used  in  commerce,  yet  it  cannot  in  the  ex- 
ercise of  such  power  interfere  with  that  freedom  from  governmental 
burden  in  the  matter  of  exports  which  it  was  the  intention  of  the 
Constitution  to  protect  and  preserve.  It  must  be  noticed  that  by 
this  act  of  1898  while  a  variety  of  stamp  taxes  are  imposed,  a  dis- 
crimination is  made  between  the  tax  imposed  upon  an  ordinary  in- 
ternal bill  of  lading  and  that  upon  one  having  respect  solely  to  mat- 
ters  of  export.  An  ordinary  bill  of  lading  is  charged  one  cent;  an 
export  bill  of  lading  ten  cents.  So  it  is  insisted  that  there  was  not 


FAIRBANK   V.   UNITED   STATES.  175 

simply  an  effort  to  place  a  stamp  duty  on  all  documents  of  a  similar 
nature  but  by  virtue  of  the  difference  an  attempt  to  burden  exports 
with  a  discriminating  and  excessive  tax. 

The  requirement  of  the  Constitution  is  that  exports  should  be  free 
from  any  governmental  burden.  The  language  is  "no  tax  or  duty." 
Whether  such  provision  is  or  is  not  wise  is  a  question  of  policy  with 
which  the  courts  have  nothing  to  do.  We  know  historically  that  it 
is  one  of  the  compromises  which  entered  into  and  made  possible  the 
adoption  of  the  Constitution.  It  is  a  restriction  on  the  power  of 
Congress;  and  as  in  accordance  with  the  rules  heretofore  noticed  the 
grants  of  powers  should  be  so  construed  as  to  give  full  efficacy  to 
those  powers  and  enable  Congress  to  use  such  means  as  it  deems 
necessary  to  carry  them  into  effect,  so  in  like  manner  a  restriction 
should  be  enforced  in  accordance  with  its  letter  and  spirit,  and  no 
legislation  can  be  tolerated  which,  although  it  may  not  conflict  with 
the  letter,  destroys  the  spirit  and  purpose  of  the  restriction  imposed. 
If,  for  instance,  Congress  may  place  a  stamp  duty  of  ten  cents  on 
bills  of  lading  on  goods  to  be  exported  it  is  because  it  has  power 
to  do  so,  and  if  it  has  power  to  impose  this  amount  of  stamp  duty 
it  has  like  power  to  impose  any  sum  in  the  way  of  stamp  duty  which 
it  sees  fit.  And  it  needs  but  a  moment's  reflection  to  show  that 
thereby  it  can  as  effectually  place  a  burden  upon  exports  as  though 
it  placed  a  tax  directly  upon  the  articles  exported.  It  can,  for  the 
purposes  of  revenue,  receive  just  as  much  as  though  it  placed  a  duty 
directly  upon  the  articles,  and  it  can  just  as  fully  restrict  the  free 
exportation  which  was  one  of  the  purposes  of  the  Constitution. 

The  power  to  tax  is  the  power  to  destroy.  And  that  power  can 
be  exercised  not  only  by  a  tax  directly  on  articles  exported,  but  also 
and  equally  by  a  stamp  duty  on  bills  of  lading  evidencing  the  ex- 
port  The  question  of  power  is  not  to  be  determined 

by  the  amount  of  the  burden  attempted  to  be  cast.  The  constitu- 
tional language  is  "no  tax  or  duty."  A  ten  cent  tax  or  duty  is  in 
conflict  with  that  provision  as  certainly  as  an  hundred  dollar  tax  or 
duty.  Constitutional  mandates  are  imperative.  The  question  is 
never  one  of  amount  but  one  of  power.  The  applicable  maxim  is 
"obsta  principles,"  not  "de  minimis  non  curatur  lex." 

If  all  exports  must  be  free  from  national  tax  or  duty,  such  free- 
dom requires  not  simply  an  omission  of  a  tax  upon  the  articles  ex- 
ported, but  also  a  freedom  from  any  tax  which  directly  burdens  the 
exportation,  and,  as  we  have  shown,  a  stamp  tax  on  a  bill  of  lading, 
which  evidences  the  export,  is  just  as  clearly  a  burden  on  the  ex- 


176  LIMITATIONS  OF  THE  TAXING  POWER. 

portation  as  a  direct  tax  on  the  article  mentioned  in  the  bill  of 
lading  as  the  subject  of  the  export. 

In  Nicol  v.  Ames,  173  U.  S.  509,  we  had  occasion  to  consider  this 
very  act  in  reference  to  another  stamp  duty We  sus- 
tained that  tax  as  a  tax  upon  the  privilege  or  facilities  obtained  by 
dealings  on  exchange,  saying  (p.  521)  : 

"A  tax  upon  the  privilege  of  selling  property  at  the  exchange  and 
of  thus  using  the  facilities  there  offered  in  accomplishing  the  sale  dif- 
fers radically  from  a  tax  upon  every  sale  made  in  any  place.  The 
latter  tax  is  really  and  practically  upon  property." 

If  it  be  true  that  a  stamp  tax  required  upon  every  instrument  evi- 
dencing a  sale  is  really  and  practically  a  tax  upon  the  property  sold, 
it  is  equally  clear  that  a  stamp  duty  upon  foreign  bills  of  lading  is 
a  tax  upon  the  articles  exported. 

These  considerations  find  ample  support  in  prior  adjudications  of 
this  court.  Thus,  in  Almy  v.  California,  24  How.  169,  174;  it  ap- 
peared that  the  State  of  California  had  imposed  a  stamp  tax  on  bills 
of  lading  for  gold  or  silver  shipped  to  any  place  outside  of  the  State, 
and  the  contention  was  that  such  stamp  tax  was  not  a  tax  on 
the  goods  themselves,  but  the  court  said : 

"But  a  tax  or  duty  on  a  bill  of  lading,  although  differing  in  form 
from  a  duty  on  the  article  shipped,  is  in  substance  the  same  thing; 
for  a  bill  of  lading  or  some  written  instrument  of  the  same  import 
is  necessarily  always  associated  with  every  shipment  of  articles  of 
commerce  from  the  ports  of  one  country  to  those  of  another.  The 
necessities  of  commerce  require  it.  And  it  is  hardly  less  necessary  to 
the  existence  of  such  commerce  than  casks  to  cover  tobacco  or  bag- 
ging to  cover  cotton  when  such  articles  are  exported  to  a  foreign  coun- 
try ;  for  no  one  would  put  his  property  in  the  hands  of  a  ship  master 
without  taking  written  evidence  of  its  receipt  on  board  the  vessel  and 
the  purposes  for  which  it  was  placed  in  his  hands.  The  merchant 
could  not  send  an  agent  with  every  vessel,  to  inform  the  consignee  of 
the  cargo  of  what  articles  he  had  shipped,  and  prove  the  contract  of 
the  master  if  he  failed  to  deliver  them  in  safety.  A  bill  of  lading, 
therefore,  or  some  equivalent  instrument  of  writing,  is  invariably  as- 
sociated with  every  cargo  of  merchandise  exported  to  a  foreign  coun- 
try, and  consequently  a  duty  upon  that  is  a  duty  on  the  article  ex- 
ported." 


On  the  other  hand,  Pace  v.  Burgess,  Collector,  92  TJ.  S.  372,  is 
cited  as  an  authority  against  these  conclusions;  but  an  examination 


FAIRBANK  V.   UNITED   STATES.  177 

of  the  case  shows  that  this  is  a  mistake.  The  act  of  1868,  15  Stat. 
123,  imposed  certain  taxes  on  the  manufacture  of  tobacco  for  con- 
sumption or  use,  required  as  evidence  of  the  payment  of  such  taxes 
the  affixing  of  revenue  stamps  to  the  packages,  and  forbade  the  re- 
moval of  any  tobacco  from  the  factory  without  payment  of  the  taxes 
and  affixing  of  the  stamps.  It  further  provided  that  tobacco  might 
be  manufactured  for  export  and  exported  without  payment  of  any 
tax.  .  .  .  "The  proper  fees  accruing  in  the  due  administration 
of  the  laws  and  regulations  necessary  to  be  observed  to  protect  the 
government  from  imposition  and  fraud  likely  to  be  committed  under 
the  pretence  of  exportation  are  in  no  sense  a  duty  on  exportation. 
They  are  simply  the  compensation  given  for  services  properly  ren- 
dered. The  rule  by  which  they  are  estimated  may  be  an  arbitrary 
one;  but  an  arbitrary  rule  may  be  more  convenient  and  less  onerous 
than  any  other  which  can  be  adopted.  The  point  to  guard  against 
is,  the  imposition  of  a  duty  under  the  pretext  of  fixing  a  fee.  In 
the  case  under  consideration,  having  due  regard  to  that  latitude  of 
discretion  which  the  legislature  is  entitled  to  exercise  in  the  selection 
of  the  means  for  attaining  a  constitutional  object,  we  cannot  say  that 
the  charge  imposed  is  excessive,  or  that  it  amounts  to  an  infringe- 
ment of  the  constitutional  provision  referred  to.  We  cannot  say  that 
it  is  a  tax  or  duty  instead  of  what  it  purports  to  be,  a  fee  or  charge, 
for  the  employment  of  that  instrumentality  which  the  circumstances 
of  the  case  render  necessary  for  the  protection  of  the  government. 

"One  cause  of  difficulty  in  the  case  arises  from  the  use  of  stamps 
as  one  of  the  means  of  segregating  and  identifying  the  property  in- 
tended to  be  exported.  It  is  the  form  in  which  many  taxes  and  du- 
ties are  imposed  and  liquidated;  stamps  being  seldom  used  except 
for  the  purpose  of  levying  a  duty  or  tax.  But  we  must  regard  things 
rather  than  names.  A  stamp  may  be  used,  and,  in  the  case  before  us 
we  think  it  is  used  for  quite  a  different  purpose  than  that  of  impos- 
ing a  tax  or  duty;  indeed,  it  is  used  for  the  very  contrary  purpose — 
that  of  securing  exemption  from  a  tax  or  duty.  The  stamps  required 
by  recent  laws  to  be  affixed  to  all  agreements,  documents  and  papers, 
and  to  different  articles  of  manufacture,  were  really  and  in  truth 
taxes  and  duties,  and  were  intended  as  such.  The  stamp  required  to 
be  placed  on  gold  dust  exported  from  California  by  a  law  of  that 
State  was  clearly  an  export  tax,  as  this  court  decided  in  the  case  of 
Almy  v.  The  State  of  California,  24  How.  169.  In  all  such  cases  no 
one  could  entertain  a  reasonable  doubt  on  the  subject." 

Another  matter  pressed  upon  our  attention,  which  deserves  and  has 

12 


178  LIMITATIONS  OF  THE  TAXING  POWER 

received  careful  consideration,  is  the  practical  construction  of  this 
constitutional  provision  by  legislative  action. 

From  this  resume  of  our  decisions  it  clearly  appears  that  practical 
construction  is  relied  upon  only  in  cases  of  doubt.  We  have  referred 
to  it  when  the  construction  seemed  to  be  demonstrable,  but  then 
only  in  response  to  doubts  suggested  by  counsel.  Where  there  was 
obviously  a  matter  of  doubt,  we  have  yielded  assent  to  the  construc- 
tion placed  by  those  having  actual  charge  of  the  execution  of  the  stat- 
ute, but  where  there  was  no  doubt  we  have  steadfastly  declined  to 
recognize  any  force  in  practical  construction.  Thus,  before  any  ap- 
peal can  be  made  to  practical  construction,  it  must  appear  that  the 
true  meaning  is  doubtful. 

We  have  no  disposition  to  belittle  the  significance  of  this  matter. 
It  is  always  entitled  to  careful  consideration,  and  in  doubtful  cases  will, 
as  we  have  shown,  often  turn  the  scale;  but  when  the  meaning  and 
scope  of  a  constitutional  provision  are  clear,  it  cannot  be  overthrown 
by  legislative  action,  although  several  times  repeated  and  never  be- 
fore challenged.  It  will  be  perceived  that  these  stamp  duties  have 
been  in  force  during  only  three  periods:  First,  from  1797  to  1802; 
second,  from  1862  to  1872;  and,  third,  commencing  with  the  recent 
statute  of  1898.  It  must  be  borne  in  mind  also,  in  respect  to  this 
matter  that  during  the  first  period  exports  were  limited,  and  the 
amount  of  the  stamp  duty  was  small,  and  that  during  the  second 
period  we  were  passing  through  the  stress  of  a  great  civil  war  or 
endeavoring  to  carry  its  enormous  debt;  so  that  it  is  not  strange  that 
the  legislative  action  in  this  respect  passed  unchallenged.  Indeed, 
it  is  only  of  late  years  when  the  burdens  of  taxation  are  increasing 
by  reason  of  the  great  expenses  of  government,  that  the  objects  and 
modes  of  taxation  have  become  a  matter  of  special  scrutiny.  But  the 
delay  in  presenting  these  questions  is  no  excuse  for  not  giving  them 
full  consideration  and  determining  them  in  accordance  with  the  true 
meaning  of  the  Constitution. 

Without  enlarging  further  on  these  matters,  we  are  of  opinion  that 
a  stamp  tax  on  a  foreign  bill  of  lading  is  in  substance  and  effect 
equivalent  to  a  tax  on  the  articles  included  in  that  bill  of  lading, 
and,  therefore,  a  tax  or  duty  on  exports,  and  in  conflict  with  the  con- 
stitutional prohibition.  The  judgment  of  the  District  Court  will  be 
reversed  and  the  case  remanded  with  instruction  to  grant  a  new  trial. 

Mr.  Justice  HARLAN  (with  whom  concurred  Mr.  Justice  GRAY, 
Mr.  Justice  WHITE  and  Mr.  Justice  McKENNA,)  dissenting. 


SAN  MATED  CO.  V.  S.  P.  E.  R.  CO.  179 

III.     DUE  PROCESS  OF  LAW  AND  EQUAL  PROTECTION  OF  THE  LAWS. 

1.     Hearing  Necessary. 
COUNTY  OF  SAN  MATEO  V.  SOUTHERN  PACIFIC  R.  R.  CO. 

United  States  Circuit  Court,  District  of  California.     September  25, 
1882.    13  Federal  Reporter  722. 

FIELD,  Justice.  This  action  is  brought  to  recover  of  the  Southern 
Pacific  Railroad  Company,  a  corporation  formed  under  the  laws  of 
California,  certain  state  and  county  taxes  levied  upon  its  property  for 
the  fiscal  year  of  1881  and  1882,  alleged  to  be  due  to  the  plaintiff, 
with  5  per  cent  added  for  their  non-payment,  and  interest.  It  was 
commenced  in  one  of  the  superior  courts  of  the  state,  and,  on  appli- 
cation of  the  defendant,  was  removed  to  this  court. 

The  railroad  company  contends  that  the  taxes  are  invalid  and  void 
on  two  grounds : 

(2)  Because  the  assessment  was  made  in  pursuance  of  provisions 
of  the  state  constitution,  which  gave  no  notice  to  the  company,  and 
afforded  it  no  opportunity  to  be  heard  respecting  the  value  of  the 
property,  or  for  the  correction  of  any  errors  of  the  board,  thus  depriv- 
ing it  of  its  property  without  due  process  of  law  guaranteed  by  [the 
fourteenth  amendment  of  the  United  States  Constitution.] 

The  Political  Code  provides  that  the  assessment  shall  be  made  by 
the  state  board  on  or  before  the  first  Monday  in  May  of  each  year; 
that  the  president,  secretary  cashier,  or  managing  agent,  or  such  offi- 
cer of  the  corporation  as  the  board  may  designate,  shall  furnish  to 
the  board,  on  or  before  the  first  Monday  of  April  of  the  year,  a  state- 
ment, signed  and  sworn  to  by  him,  showing  in  detail  the  whole  num- 
ber of  miles  of  railway  owned,  operated,  or  leased  in  the  state  by  the 
corporation,  and  the  value  thereof  per  mile,  and  all  its  property  of 
every  kind  located  in  the  state,  the  number  and  value  of  its  engines, 
passenger,  mail,  express,  baggage,  freight,  and  other  cars,  or  prop- 
erty used  in  operating  or  repairing  the  railway  in  the  state,  and  on 
railways  which  are  parts  of  lines  extending  beyond  its  limits,  the 
amount  of  the  rolling  stock  in  use  during  the  year,  the  annual  gross 
earnings  of  the  entire  railway,  and  the  proportionate  annual  gross 
earnings  of  the  same  in  the  state,  and  such  other  facts  as  the  board 


180  LIMITATIONS  OF  THE  TAXING  POWER. 

may  in  writing  require;  and  that  if  the  officer  or  officers  designated 
fail  to  make  and  furnish  such  statement,  the  board  shall  proceed  to 
assess  the  property;  and  the  valuation  fixed  shall  be  final  and  con- 
clusive  

We  have  no  doubt  that  further  legislation  might  have  been  adopted 
providing  for  notice  to  the  company,  and  a  system  of  procedure  by 
which  it  might  have  been  heard  respecting  the  assessment.  We  do 
not  understand  that  the  supreme  court  of  the  state  intended  by  the 
decision  cited  (People  v.  Sup'rs  of  Sacramento  County,  8  Pac.  Law. 
J.  103)  to  hold  that  the  tenth  section  of  the  thirteenth  article  is  self 
executing,  except  to  the  extent  that  it  vests  complete  power  in  the 
state  board  to  make  the  assessment  of  the  property ;  nor  that  legisla- 
tion may  not  be  had  providing  for  the  mode  in  which  the  powers  of 
the  board  shall  be  exercised.  Indeed,  the  concluding  section  of  the 
article  authorizes  any  legislation  necessary  to  give  effect  to  its  pro- 
visions. Unfortunately,  no  such  legislation  has  been  had.  The  at- 
tempted legislation  failed,  because  it  did  not  receive  in  the  legislature 
the  constitutional  majority,  as  is  clearly  shown  by  the  circuit  judge 
in  his  opinion.  It  is  unnecessary  to  go  over  the  ground  he  has  com- 
pletely covered. 

The  presentation  to  the  state  board  by  the  corporation  of  a  state- 
ment of  its  property  and  of  its  value,  which  it  is  required  to  furnish, 
is  not  the  equivalent  to  a  notice  of  the  assessment  made  and  of  an 
opportunity  to  be  heard  thereon.  It  is  a  preliminary  proceeding,  and 
until  the  assessment  the  corporation  cannot  know  whether  it  will  have 
good  cause  of  complaint.  No  hearing  upon  the  statement  presented 
is  allowed,  and  when  the  assessment  is  made  the  matter  is  closed;  no 
opportunity  to  correct  any  errors  committed  is  provided.  The  pres- 
entation of  the  statement  can  no  more  supersede  the  necessity  of  al- 
lowing a  subsequent  hearing  of  the  owners,  than  the  filing  of  a  com- 
plaint in  court  can  dispense  with  the  right  of  the  suitor  and  his  con- 
testant to  be  there  heard. 

There  being,  then,  no  provisions  of  law  giving  to  the  company  no- 
tice of  the  action  of  the  state  board,  and  an  opportunity  to  be  heard 
respecting  it,  is  the  assessment  valid?  Would  the  taking  of  the  com- 
pany's property  in  the  enforcement  of  the  tax  levied  according  to  the 
assessment  be  depriving  it  of  its  property  without  due  process  of  law  ? 
It  seems  to  us  that  there  can  be  but  one  answer  to  these  questions. 
There  is  something  repugnant  to  all  notions  of  justice  in  the  doctrine 
that  any  body  of  men  can  be  clothed  with  the  power  of  finally  deter- 
mining the  value  of  another's  property,  according  to  which  it  may  be 
taxed,  without  affording  him  an  opportunity  of  being  heard  respect- 


SAN  MATEO  CO.  V.  S.  P.  R.  R.  CO.  181 

ing  the  correctness  of  their  action.  And  tho  injustice  is  strikingly 
apparent  when  the  property  consists  of  the  great  number  of  particu- 
lars which  go  to  make  up  the  taxable  estate  of  a  railroad  company, 
requiring  for  any  just  estimate  of  their  value  accurate  knowledge 
upon  a  multitude  of  subjects,  not  usually  possessed  without  special 
study.  We  cannot  assent  to  any  such  doctrine.  It  conflicts  with  the 
great  principle  which  lies  at  the  foundation  of  all  just  government, 
that  no  one  shall  be  deprived  of  his  life,  his  liberty,  or  his  property 
without  an  opportunity  of  being  heard  against  the  proceeding.  The 
principle  is  as  old  as  Magna  Charta,  and  is  embodied  in  all  the  state 
constitutions,  and  in  the  fourteenth  amendment  of  the  federal  Con- 
stitution. The  provision  in  this  amendment  is  in  the  form  of  an  in- 
terdict upon  the  states — "Nor  shall  any  state  deprive  any  person  of 
life,  liberty,  or  property  without  due  process  of  law."  And  by  due 
process  is  meant  one  which,  following  the  forms  of  law,  is  appro- 
priate to  the  case,  and  just  to  the  parties  to  be  affected.  It  must  be 
pursued  in  the  ordinary  mode  prescribed  by  the  law.  It  must  be 
adapted  to  the  ends  to  be  attained ;  and  it  must  give  to  the  party  to 
be  affected  an  opportunity  of  being  heard  respecting  the  justice  of 
the  judgment  sought.  Without  ,iiese  conditions  entering  into  the 
proceeding,  it  would  be  anything  but  due  process.  If  it  touched  life 
or  liberty,  it  would  be  wanton  punishment,  or  rather  wanton  cruelty; 
if  it  touched  property,  it  would  be  arbitrary  exaction.  It  is  signifi- 
cant that  the  guaranty  against  the  deprivation  of  property  without 
due  process  of  law  is  contained  in  the  clause  which  guarantees 
against  a  like  deprivation  of  life  and  liberty;  and  it  means  that  there 
shall  be  no  proceeding  against  either  without  the  observance  of  all 
the  securities  applicable  to  the  case  recognized  by  the  general  law,  by 
those  principles  which  are  established  in  all  constitutional  govern- 
ments for  the  protection  of  private  rights.  Notice  is  absolutely  essen- 
tial to  the  validity  of  the  proceeding  in  any  case;  it  may  be  given  by 
personal  citation,  and  in  some  cases  it  may  be  given  by  statute;  and 
given  it  must  be  in  some  form.  If  life  and  liberty  are  involved,  there 
must  be  a  regular  course  of  judicial  proceedings ;  so,  also,  where  title 
or  possession  of  property  is  in  contention.  But  in  the  taking  of  prop- 
erty by  taxation  the  proceeding  is  more  summary  and  stringent.  The 
necessities  of  revenue  for  the  support  of  government  will  not  admit 
of  the  delays  attendant  upon  judicial  proceedings  in  the  courts  of 
justice.  The  statute  fixes  the  rate  of  taxation  upon  the  value  of  the 
property,  and  appoints  officers  to  estimate  and  appraise  the  value. 
Due  process  of  law  in  the  proceeding  is  deemed  to  be  pursued,  when 
after  assessment  is  made  by  the  assessing  officers  upon  such  informa- 


182  LIMITATIONS  OF  THE  TAXING  POWER. 

tion  as  they  may  obtain,  the  owner  is  allowed  a  reasonable  oppor- 
tunity, at  a  time  and  place  to  be  designated,  to  be  heard  respecting 
the  correctness  of  the  assessment,  and  to  show  any  errors  in  the  val- 
uation committed  by  the  officers.  Notice  to  him  will  be  deemed  suffi- 
cient, if  the  time  and  place  be  designated  by  statute.  But  whatever 
the  character  of  the  proceeding,  whether  judicial  or  administrative, 
summary  or  protracted,  and  whether  it  takes  property  directly  or  cre- 
ates a  charge  or  liability  which  may  be  the  basis  of  taking  it,  the  law 
directing  the  proceeding  must  provide  for  some  kind  of  notice,  and 
offer  to  the  owner  an  opportunity  to  be  heard,  or  the  proceeding  will 
want  the  essential  ingredient  of  due  process  of  law.  Nothing  is 
more  clearly  established  by  a  weight  of  authority  absolutely  over- 
whelming than  that  notice  and  opportunity  to  be  heard  are  indispen- 
sable to  the  validity  of  the  proceeding. 

In  Davidson  v.  New  Orleans,  the  Supreme  Court  of  the  United 
States  assumed  this  position  to*  be  unquestionable.  In  that  case  an 
assessment  levied  upon  certain  real  estate  in  New  Orleans  for  drain- 
ing the  swamps  of  that  city  was  resisted  on  the  ground  that  the  pro- 
ceeding deprived  the  owners  of  their  property  without  due  process  of 
law;  and  the  court  refused  to  disturb  it  for  the  reason  that  the  own- 
ers of  the  property  had  notice  of  the  assessment  and  an  opportunity 
to  contest  it  in  the  courts.  After  stating  that  much  misapprehension 
prevailed  as  to  the  meaning  of  the  terms  "due  process  of  law,"  and 
that  it  would  be  difficult  to  give  a  definition  which  would  at  once  be 
perspicuous,  comprehensive,  and  satisfactory,  the  courts,  speaking 
through  Mr.  Justice  Miller,  said  that  it  would  lay  down  the  follow- 
ing proposition  as  applicable  to  the  case: 

"That  whenever  by  the  laws  of  a  state,  or  by  state  authority,  a  tax, 
assessment,  servitude,  or  other  burden  is  imposed  upon  property  for 
the  public  use,  whether  it  be  for  the  whole  state  or  for  some  limited 
portion  of  the  community,  and  those  laws  provide  for  a  mode  of  con- 
firming or  contesting  the  charge  thus  imposed,  in  the  ordinary  course 
of  justice,  with  notice  to  the  person,  or  such  proceeding  in  regard  to 
the  property  as  is  appropriate  to  the  nature  of  the  case,  the  judg- 
ment in  such  proceedings  cannot  be  said  to  deprive  the  owner  of  his 
property  without  due  process  of  law,  however  obnoxious  it  may  be  to 
other  objections."  96  U.  S.  104. 

In  Stuart  v.  Palmer  the  meaning  of  these  terms  is  elaborately  con- 
sidered by  the  court  of  appeals  of  New  York  with  reference  to  numer- 
ous adjudications  on  the  subject.  In  that  case  a  law  of  the  state 
imposed  an  assessment  on  certain  real  property  for  a  local  improve- 
ment without  notice  to  the  owner,  and  a  hearing  or  an  opportunity 


SAN  MATED  CO.  V.  S.  P.  R.  R.  CO.  183 

to  be  heard  by  him,  and  the  court  held  that  it  had  the  effect  of  de- 
priving him  of  his  property  without  due  process  of  law,  and 
was  therefore  unconstitutional.  Mr.  Justice  Earl,  speaking  for  the 
court,  said: 

"1  am  of  the  opinion  that  the  constitution  sanctions  no  law  im- 
posing such  an  assessment  without  a  notice  to,  and  a  hearing,  or  an 
opportunity  of  hearing,  by  the  owners  of  the  parcel  to  be  assessed. 
It  is  not  enough  that  the  owners  may  by  chance  have  notice,  or  that 
they  may,  as  a  matter  of  favor,  have  a  hearing.  The  law  must  re- 
quire notice  to  them,  and  give  them  a  right  to  a  hearing,  and  an  op- 
portunity to  be  heard.  It  matters  not,  upon  the  question  of  ^  the  con- 
stitutionality of  such  a  law,  that  the  assessment  has  in  fact  been  fairly 
apportioned.  The  constitutionality  of  a  law  is  to  be  tested,  not  by 
what  has  been  done  under.it,  but  what  may,  by  its  authority,  be 
done.  The  legislature  may  prescribe  the  kind  of  notice,  and  the  mode 
in  which  it  shall  be  given,  but  it  cannot  dispense  with  all  notice." 
And,  again,  that  "no  case,  it  is  believed,  can  be  found  in  which  it 
was  decided  that  this  constitutional  guaranty  (against  depriving  one 
of  his  property  without  due  process  of  law)  did  not  extend  to  cases  of 
assessments ;  and  yet  we  may  infer,  from  certain  dicta  of  judges,  that 
their  attention  was  not  called  to  it,  or  that  they  lost  sight  of  it  in 
the  cases  which  they  were  considering.  It  has  sometimes  been  inti- 
mated that  a  citizen  is  not  deprived  of  his  property,  within  the  mean- 
ing of  this  constitutional  provision,  by  the  imposition  of  an  assess- 
ment. It  might  as  well  be  said  that  he  is  not  deprived  of  his  prop- 
erty by  a  judgment  entered  against  him.  A  judgment  does  not  take 
property  until  it  is  enforced,  and  then  it  takes  the  real  or  personal 
property  of  the  debtor.  So  an  assessment  may  generally  be  enforced, 
not  only  against  the  real  estate  upon  which  it  is  a  lien,  but,  as  in 
this  case,  against  the  personal  property  of  the  owner  also;  and  by  it  he 
may  just  as  much  be  deprived  of  his  property,  and  in  the  same  sense, 
as  the  judgment  debtor  is  deprived  of  his  by  the  judgment."  74  N. 
Y.  188,  195. 

We  concur  fully  in  the  views  thus  forcibly  expressed. 

We  have  already  extended  this  opinion  to  a  great  length,  and  we 
do  not  think  it  necessary  or  important  to  notice  other  positions  urged 
by  counsel  with  great  learning  and  ability  against  the  validity  of  the 
taxes  for  which  the  present  action  is  brought  We  are  satisfied  that 
the  assessment  upon  which  they  were  levied  is  invalid  and  void,  and 
judgment  must  accordingly  be  entered  on  the  demurrer  for  the  de- 


184  LIMITATIONS  OF  THE  TAXING  POWER. 

fendant,  and,  by  stipulation  of  parties,  the  judgment  must  be  made 
final. 

See  also  Matter  of  McPherson,  104  N.  Y.  306,  infra.  But  a  hearing  prior 
to  the  assessment  of  the  tax  would  not  seem  to  be  necessary  in  the  case  of 
specific  taxes  such  as  licenses  taxes.  See  McMillen  v.  Anderson  95  U.  S.  37 
infra. 


2.     Vested  Rights. 
ORE  V.  OILMAN. 

Supreme  Court  of  the  United  States.     October,  1901. 
183  United  States,  278. 

Mr.  Justice  SHIRAS  delivered  the  opinion  of  the  court. 

This  is  the  case  of  a  so-called  transfer  tax  imposed  under  the  laws 
of  the  State  of  New  York.  The  various  contentions  of  the  plaintiffs 
in  error,  attacking  the  validity  of  the  tax,  were  overruled  by  the 
courts  of  the  State,  and  the  cause  is  now  before  us  on  the  general 
proposition  that  by  the  proceedings  the  plaintiffs  in  error,  or  those 
whom  they  represent  as  trustees  and  guardians,  have  been  deprived  of 
the  equal  protection  of  the  laws  of  the  State  of  New  York,  their  priv- 
ileges and  immunities  as  citizens  of  the  United  States  having  been 
abridged,  and  their  property  taken  without  due  process  of  law,  in  vio- 
lation of  .the  Fourteenth  Amendment  to  the  Constitution  of  the 
United  States,  and  likewise,  as  to  a  portion  of  the  property  affected, 
in  violation  of  section  10  of  article  1  of  the  Constitution  of 
the  United  States. 

The  first  question  presented  arises  out  of  subdivision  5  of  section 
220  of  the  tax  law  of  the  State  of  New  York,  which  reads  as  fol- 
lows: 

"5.  Whenever  any  person,  or  corporation,  shall  exercise  a  power 
of  appointment,  derived  from  any  disposition  of  'property,  made 
either  before  or  after  the  passage  of  this  act,  such  appointment,  when 
made,  shall  be  deemed  a  transfer,  taxable,  under  the  provisions  of 
this  act,  in  the  same  manner  as  though  the  property,  to  which  such 
appointment  relates,  belonged  absolutely  to  the  donee  of  such  power, 
and  had  been  bequeathed,  or  devised,  by  such  donee  by  will;  and 
whenever  any  person,  or  corporation,  possessing  such  a  power  of  ap- 
pointment, so  derived,  shall  omit,  or  fail,  to  exercise  the  same  within 
the  time  provided  therefor,  in  whole  or  in  part,  a  transfer,  taxable 
under  the  provisions  of  this  act,  shall  be  deemed  to  take  place  to  the 


OER  V.  OILMAN.  185 

extent  of  such  omissions,  or  failure,  in  the  same  manner  as  though 
the  persons,  or  corporations,  thereby  becoming  entitled  to  the  posses- 
sions, or  enjoyment  of  the  property  to  which  such  power  related,  had 
succeeded  thereto,  by  a  will  of  the  donee,  of  the  power  failing  to  ex- 
ercise such  power,  taking  effect  at  the  time  of  such  omission,  or  fail- 
ure." 

This  enactment  became  a  law  on  April  16,  1897.  David  Dows, 
Senior,  died  March  30,  1890,  leaving  a  will  containing  a  power  of 
appointment  to  his  son,  David  Dows,  Junior,  which  will  was  duly 
admitted  to  probate  by  the  Surrogate's  Court  on  April  14,  1890. 
David  Dows,  Junior,  died  on  January  13,  1899,  leaving  a  will,  in 
which  he  exercised  the  power  of  appointment  given  him  in  the  will 
of  his  father,  and  apportioned  the  property,  which  was  the  subject  of 
the  power,  among  his  three  sons,  who  are  represented  in  this  litiga- 
tion by  the  plaintiff  in  error. 

It  is  claimed  that,  under  the  law  of  the  State  of  New  York  as  it 
stood  at  the  time  of  his  death,  in  1890,  David  Dows,  Senior,  had  a 
legal  right  to  transfer,  by  will,  his  property  or  any  interest  therein, 
to  his  grandchildren,  without  any  diminution,  or  impairment,  then 
imposed  by  the  law  of  the  State  upon  the  exercise  of  that  right ;  that 
his  said  grandchildren  acquired  vested  rights  in  the  property  so  trans- 
ferred, and  that  the  subsequent  law,  whose  terms  have  been  above 
transcribed,  operates  to  diminish  and  impair  those  vested  rights.  In 
other  words,  it  is  claimed  that  it  is  not  competent  for  the  State,  by 
a  subsequent  enactment,  to  exact  a  price  or  charge  for  a  privilege 
lawfully  exercised  in  1890,  and  to  thus  take  from  the  grandchildren 
a  portion  of  the  very  property  the  full  right  to  which  had  vested  in 
them  many  years  before. 

We  here  meet,  in  the  first  place,  the  question  of  the  construction 
of  the  will  of  David  Dows,  Senior.  Under  and  by  virtue  of  that 
will,  did  the  property,  whose  transfer  is  taxed,  pass  to  and  become 
vested  in  the  grandchildren,  or  did  the  property  not  become  vested 
in  them  until  and  by  virtue  of  the  will  of  David  Dows,  Junior,  exer- 
cising the  power  of  appointment?  The  answer  to  be  given  to  this 
question  must,  of  course,  be  that  furnished  us  by  the  Court  of  Ap- 
peals in  this  case.  Matter  of  Dows,  167  N.  Y.  227 : 

"Whatever  be  the  technical  source  of  title  of  a  grantee  under  a 
power  of  appointment,  it  cannot  be  denied  that,  in  reality  and  sub- 
vstance,  it  is  the  execution  of  the  power  that  gives  the  grantee  the 
property  passing  under  it.  The  will  of  Dows,  Senior,  gave  his  son 
s\  power  of  appointment,  to  be  exercised  only  in  a  particular  man- 
ner, to  wit,  by  last  will  and  testament.  If,  as  said  by  the  Supreme 


186  LIMITATIONS  OP  THE  TAXING  POWER. 

Court  of  the  United  States,  the  right  to  take  property  by  devise  is 
not  an  inherent  or  natural  right,  but  a  privilege  accorded  by  the 
State,  which  it  may  tax  or  charge  for,  it  follows  that  the  request  of 
a  testator  to  make  a  will  or  testamentary  instrument  is  equally  a 
privilege  and  equally  subject  to  the  taxing  power  of  the  State.  When 
David  Dows,  Senior,  devised  this  property  to  the  appointees  under 
the  will  of  his  son  he  necessarily  subjected  it  to  the  charge  that  the 
State  might  impose  on  the  privilege  accorded  to  the  son  of  making 
a  will.  That  charge  is  the  same  in  character  as  if  it  had  been  laid 
on  the  inheritance  of  the  estate  of  the  son  himself,  that  is,  for  the 
privilege  of  succeeding  to  property  under  a  will." 

It  will  be  seen  that>  in  putting  this  construction  upon  the  will  of 
David  Dows,  Senior,  the  Court  of  Appeals  not  merely  construed 
the  words  of  the  will  but,  by  implication,  applied  to  the  case  the  pro- 
visions of  subdivision  5  of  section  220,  under  which  the  transfer  tax 
in  question  was  imposed,  and  thus  construed  the  tax  law  and  affirmed 
its  validity. 

While  it  is  settled  law  that  this  court  will  follow  the  construction 
put  by  the  State  courts  upon  wills  devising  property  situated  within 
the  State,  and  while  it  is  also  true  that  we  adopt  the  construction  of 
its  own  statutes  by  the  State  courts,  a  question  may  remain  whether 
the  statute,  as  so  construed,  imports  a  violation  of  any  of  the  rights 
secured  by  applicable  provisions  of  the  Constitution  of  the  United 
States.  And  such  is  the  contention  here. 

This  court  has  no  authority  to  revise  the  statutes  of  New  York 
upon  any  grounds  of  justice,  policy  or  consistency  to  its  own  consti- 
tution. Such  questions  are  concluded  by  the  decision  of  the  legis- 
lative and  judicial  authorities  of  the  State. 

In  Carpenter  v.  Pennsylvania,  17  How.  456,  the  question  arose  as 
to  the  validity,  in  its  Federal  aspect,  of  a  law  of  the  State  of  Penn- 
sylvania imposing  an  inheritance  tax  on  personal  property  which  had 
passed  into  the  possession  of  an  executor  before  the  passage  of  the 
act,  and  which  was  held  by  him  for  the  purpose  of  distribution  among 
the  legatees,  who  were  collateral  relatives  to  the  decedent.  The  act 
was  held  valid  by  the  Supreme  Court  of  the  State,  and  was  brought 
up  to  this  court  by  a  writ  of  error,  where  it  was  contended  that  such 
an  act  was  in  its  nature  an  ex  post  facto  law,  which  took  the  prop- 
erty of  an  individual  to  the  use  of  the  State,  because  of  a  fact  which 
had  occurred  prior  to  the  passage  of  the  law,  and  also  that  the  law, 
in  its  retroactive  effect,  impaired  the  obligation  of  a  contract,  in  that 
it  was  alleged  to  absolve  the  executor  from  his  contract,  implied  in 
law,  to  pay  over  the  legacies  to  those  entitled  to  them,  just  to  the 


ORR  V.  GILMAX.  1ST 

extent  that  the  law  required  him  to  pay  to  the  State.  The  opinion 
of  the  court,  delivered  by  Mr.  Justice  Campbell,  was,  in  part,  as 
follows : 

"The  validity  of  the  act,  as  affecting  successions  to  open  after  its 
enactment,  is  not  contested ;  nor  is  the  authority  of  the  State  to  levy 
taxes  upon  personal  property  belonging  to  its  citizens,  but  situated 
beyond  its  limits,  denied.  But  the  complaint  is  that  the  application 
of  the  act  to  a  succession  already  in  the  course  of  settlement,  and 
which  had  been  appropriated  by  the  last  will  of  decedent,  involved 
an  arbitrary  change  of  the  existing  laws  of  inheritance  to  the  extent 
of  this  tax,  in  the  sequestration  of  that  amount  for  the  uses  of  the 
State;  that  the  rights  of  the  residuary  legatees  were  vested  at  the 
death  of  the  testator,  and  from  that  time  those  persons  were  non- 
residents, and  the  property  taxed  was  also  beyond  the  State;  and  that 
the  State  has  employed  its  power  over  the  executor  and  the  property 
within  its  borders,  to  accomplish  a  measure  of  wrong  and  injustice; 
that  the  act  contains  the  imposition  of  a  forfeiture  or  penalty,  and 
is  ex  post  facto. 

"It  is,  in  some  sense,  true  that  the  rights  of  donees  under  a  will 
are  vested  at  the  death  of  the  testator;  and  that  the  acts  of  admin- 
istration which  follow  are  conservatory  means,  directed  by  the  State 
to  ascertain  those  rights,  and  to  accomplish  an  effective  translation 
of  the  dominion  of  the  decedent  to  the  objects  of  his  bounty;  and 
the  legislation  adopted  with  any  other  aim  than  this  would  justify 
criticism,  and  perhaps  censure.  But,  until  the  period  for  distribution 
arrives,  the  law  of  the  decedent's  domicil  attaches  to  the  property, 
and  all  other  jurisdictions  refer  to  the  place  of  the  domicil  as  thai 
where  the  distribution  should  be  made.  The  will  of  the  testator  is 
proven  there,  and  his  executor  receives  his  authority  to  collect  the 
property,  by  the  recognition  of  the  legal  tribunals  of  that  place.  The 
personal  estate,  so  far  as  it  has  a  determinate  owner,  belongs  to  the 
executor  thus  constituted.  The  rights  of  the  donee  are  subordinate 
to  the  conditions,  formalities  and  administrative  control,  prescribed 
by  the  State  in  the  interests  of  its  public  order,  and  are  only  irre- 
vocably established  upon  its  abdication  of  this  control  at  the  period 
of  distribution.  If  the  State,  during  this  period  of  administration 
and  control  by  its  tribunals  and  their  appointees,  thinks  fit  to  im- 
pose a  tax  upon  the  property,  there  is  no  obstacle  in  the  Constitution 
and  laws  of  the  United  States  to  prevent  it.  Ennis  v.  Smith,  14 
How.  400." 

It  is  true  that  this  case  was  decided  before  the  adoption  of  the 


18.8  LIMITATIONS  OF  THE  TAXING  POWER. 

Fourteenth  Amendment,  but  we  think  it  correctly  defined  the  limits 
of  jurisdiction  between  the  state  and  Federal  governments  in  respect 
to  the  control  of  the  estates  of  decedents,  both  as  they  were  regarded 
before  and  have  been  regarded  since  the  adoption  of  the  Fourteenth 
Amendment.  It  has  never  been  held  that  it  was  the  purpose  or  func- 
tion of  that  amendment  to  change  the  systems  and  policies  of  the 
States  in  regard  to  the  devolution  of  estates,  or  to  the  extent  of  the 
taxing  power  over  them. 

In  the  light  of  the  principles  thus  established  we  are  unable  to 
see  in  this  legislation  of  the  State  of  New  York,  as  construed  by  its 
highest  court,  any  infringement  of  the  salutary  provisions  of  the 
Fourteenth  Amendment.  There  are  involved  no  arbitrary  or  unequal 
regulations,  prescribing  different  rates  of  taxation  on  property  or  per- 
sons in  the  same  condition.  The  provisions  of  the  law  extend  alike 
to  all  estates  that  descend  or  devolve  upon  the  death  of  those  who 
once  owned  them.  The  moneys  raised  by  the  taxation  are  applied 
to  the  lawful  uses  of  the  State,  in  which  the  legatees  have  the  same 
interests  with  the  other  citizens.  Nor  is  it  claimed  that  the  amount 
or  rate  of  the  taxation  is  excessive  to  the  extent  of  confiscation. 

Another  objection  made  to  the  judgment  of  the  Court  of  Appeals, 
affirming  the  Surrogate's  order,  is  that  the  tax  imposed  upon  trans- 
fers made  under  a  power  of  appointment  is  a  tax  upon  property  and 
not  on  the  right  of  succession,  and  that,  as  a  portion  of  the  fund 
was  invested  in  incorporated  companies  liable  to  taxation  on  their 
own  capital,  and  in  certain  bonds  of  the  State  of  New  York,  and  in 
bonds  of  the  city  of  New  York  exempt  by  statute  from  taxation,  such 
exemption  formed  part  of  the  contract  under  which  said  securities 
were  purchased,  and  the  tax  imposed  and  the  proceedings  to  enforce 
it  were  in  violation  of  section  10  of  article  1  of  the  Constitution  of 
the  United  States  forbidding  the  States  to  pass  laws  impairing  the 
obligation  of  contracts. 

The  Court  of  Appeals  overruled  the  proposition  that  the  transfer 
tax  in  question  was  a  tax  upon  property  and  not  upon  the  right  of 
succession,  and  held  that  when  David  Dows,  Senior,  devised  this 
property  to  the  appointees  under  the  will  of  his  son  he  necessarily 
subjected  it  to  the  charge  that  the  State  might  impose  on  the  priv- 
ilege accorded  to  the  son  of  making  a  will  and  that  the  charge  is 
the  same  in  character  as  if  it  had  been  laid  on  the  inheritance  of 
the  estate  of  the  son  himself,  that  is,  for  the  privilege  of  succeeding 
to  property  under  a  will. 


SANTA  CLARA  CO.  V.  S.  P.  R.  R.  CO.  189 

In  reaching  this  conclusion  the  Court  of  Appeals  cited  not  only 
various  Xew  York  cases  but  several  decisions  of  this  court,  the  prin- 
ciples of  which  were  thought  to  be  applicable.  Magoun  v.  Illinois 
Trust  Co.,  170  U.  S.  283;  Plummer  v.  Coler,  178  U.  S.  115;  Knowl- 
ton  v.  Moore,  178  U.  S.  41 ;  Murdoch  v.  Ward,  178  U.  S.  139. 

We  think  it  unnecessary  to  enter  upon  another  discussion  of  a  sub- 
ject so  recently  considered  in  the  cases  just  cited,  and  that  it  is  suf- 
ficient to  say  that,  in  our  opinion,  the  Court  of  Appeals  did  not  err 
when  it  held  that  a  transfer  or  succession  tax,  not  being  a  direct  tax 
upon  property,  but  a  charge  upon  a  privilege  exercised  or  enjoyed 
under  the  law  of  the  State,  does  not,  when  imposed  in  cases  where 
the  property  passing  consists  of  securities  exempt  by  statute,  impair 
the  obligation  of  a  contract  within  the  meaning  of  the  Constitution 
of  the  United  States. 

The  judgment  of  the  Court  of  Appeals  of  the  State  of  New  York 
affirming  the  judgment  of  the  Surrogate's  Court  of  New  York 
County  is 

Affirmed. 

Mr.  Justice  HARLAN  concurred  in  the  result. 

See  matter  of  Peel,  171  N.  Y.  48,  infra.  Where  the  time  of  the  transfer  is 
not  fixed  by  statute  the  transfer  under  a  power  of  appointment  in  a  will 
takes  place  at  the  time  of  the  death  of  the  decedent.  Matter  of  Stewart,  131 
N.  Y.  274.  Here  a  power  of  appointment  was  exercised  so  as  to  rest  an 
estate  in  the  direct  heirs  of  the  person  exercising  the  power,  who  were 
collaterals  of  the  decedent.  They  had  to  pay  a  collateral  succession  tax. 
See  also  Com.  v.  Williams'  Executors,  13  Pa.  St.  29. 


3.    Equal  Protection  of  the  Laws. 

COUNTY  OF  SANTA  CLARA  V.  SOUTHERN  PACIFIC  R.  R. 

CO. 

United  States  Circuit  Court,  District  of  California.  September,  1883. 
18  Federal  Reporter  385. 

FIELD,  Justice.  These  are  actions  for  the  recovery  of  unpaid 
state  and  county  taxes  levied  upon  certain  property  of  the  several  de- 
fendants, either  for  the  fiscal  year  of  1881  or  of  1882,  and  alleged  to 
be  due  to  the  plaintiffs,  with  an  additional  5  per  cent  as  a  penalty 
for  their  non-payment  and  interest. 

We  shall  confine  ourselves  to  the  defenses  made  to 

the  assessment  and  tax  from  the  alleged  conflict  of  the  provisions 


190  LIMITATIONS  OF  THE  TAXING  POWER. 

under  which  they  were  levied,  with  the  requirements  of  the  fourtenth 
amendment  to  the  Constitution  of  the  United  States,  which  declares, 
that  no  state  shall  "deprive  any  person  of  life,  liberty,  or  property 
without  due  process  of  law,  nor  deny  to  any  person  within  its  juris- 
diction the  equal  protection  of  the  laws."  The  railroad  companies 
contend  that  both  inhibitions  of  this  amendment  were  violated  in  the 
assessment  and  taxation  of  their  property. 

The  constitution  of  California  provides  for  taxes  on  property,  on 
incomes,  and  on  polls.  The  taxation  on  property,  with  which  alone 
we  are  concerned  in  this  case,  is  to  be  in  proportion  to  its  value. 
There  is  no  provision  for  levying  a  specific  tax  upon  any  article  or 
kind  of  property.  It  declares  that  all  property,  not  exempt  under 
the  laws  of  the  United  States,  shall,  with  some  exceptions,  be  taxed 
according  to  its  value,  to  be  ascertained  as  prescribed  by  law;  and 
that  the  word  "property"  shall  "include  moneys,  credits,  bonds, 
stocks,  dues,  franchises,  and  all  other  matters  and  things,  real,  per- 
sonal, and  mixed,  capable  of  private  ownership." 

It  also  declares  that  "a  mortgage,  deed  of  trust,  contract,  or  other 
obligation  by  which  a  debt  is  secured,  shall,  for  the  purpose  of  as- 
sessment and  taxation,  l>e  deemed  and  treated  as  an  interest  in  the 
property  affected  thereby."  And  that,  "except  as  to  railroad  and 
other  quasi  public  corporations,  in  case  of  debts  so  secured,  the  value 
of  the  property  affected  by  such  mortgage,  deed  of  trust,  contract,  or 
obligation,  less  the  value  of  such  security,  shall  be  assessed  and  taxed 
to  the  owner  of  the  property,  and  the  value  of  such  security  shall  be 
assessed  and  taxed  to  the  owner  thereof." 

In  fixing     .     .     .     the  liabilities  of  parties  to  pay  the 

tax  assessed  and  levied  upon  property  subject  to  a  mortgage,  and  in 
estimating  the  value  of  sucli  properties  as  the  foundation  for  the 
tax,  a  discrimination  is  made  between  the  property  held  by  railroad 
and  quasi  public  corporations,  and  that  held  by  natural  persons  and 
other  corporations.  A  mortgage,  as  seen  by  the  provisions  of  the 
constitution  above  quoted,  is  deemed  and  treated,  for  the  purposes  of 
assessment  and  taxation,  as  an  interest  in  the  property  affected.  At 
common  law  a  mortgage  of  property  is  a  conveyance  of  the  title,  sub- 
ject to  a  condition  that  if  the  debt  secured  be  paid  as  stipulated,  the 
conveyance  is  to  become  inoperative.  Until  the  debt  secured  is  paid, 
the  title  is  in  the  mortgagee.  By  the  constitution,  a  mortgage,  for 
the  purposes  of  assessment  and  taxation,  operates  in  like  manner 
to  transfer  the  mortgagor's  interest  to  the  extent  represented  by  the 
amount  secured.  If  such  amount  be  half  the  value  of  the  property, 


SANTA  CLARA  CO.  V.  S.  P.  R.  R.  CO.  191 

the  taxable  interest  of  the  mortgagee  is  an  undivided  half  interest  in 
the  property.  If  the  amount  equal  or  exceed  the  whole  value  of  the 
property,  the  taxable  interest  of  the  mortgagee  embraces  the  entire 
property.  The  value  of  the  security  can  never  exceed  the  value  of 
the  property  mortgaged;  it  mav  be  less,  and  is  so  if  the  amount  se- 
cured be  less  than  such  value. 

Xow,  under  the  constitution,  when,  by  the  execution  of  a  mortgage, 
a  taxable  interest  in  the  property  held  by  natural  persons,  or  by  cor- 
porations other  than  railroads  or  quasi  public,  is  transferred  by  the 
owner  to  another  party,  or  the  whole  taxable  interest  is  vested  in 
him,  the  holder  alone  of  such  interest  is  taxed  for  it.  It  is  assessed 
against  him  as  the  owner  of  it,  and  against  him  alone  could  it  be 
justly  assessed.  But  when,  by  a  mortgage  on  the  property  of  a  rail- 
road or  quasi  public  corporation,  a  taxable  interest  in  such  property 
is  transferred  by  the  corporation  to  another,  or  the  whole  interest  is 
vested  in  him,  the  holder  of  such  interest  is  exempted  from  taxation 
for  it,  and  the  corporation  is  assessed  and  taxed  for  it  notwithstand- 
ing the  transfer.  Xo  account  is  taken  of  the  transfer  of  the  taxable 
interest  in  the  estimate  of  the  value  of  the  property.  It  is  still  as- 
sessed and  taxed  to  the  original  holder. 

Under  the  provisions  of  the  constitution,  the  property  of  the  sev- 
eral railroad  companies,  defendants  in  these  cases,  was  assessed  and 
taxed,  and  in  such  assessment  and  taxation  all  the  injurious  discrim- 
inations mentioned  were  applied  against  the  companies 

The  principle  which  sanctions  the  elimination  of  one  element  in 
assessing  the  value  of  property  held  by  one  party,  and  takes  it  into 
consideration  in  assessing  the  value  of  property  held  by  another 
party,  would  sanction  the  assessment  of  the  property  of  one  at  less 
than  its  value, — at  a  half  or  a  quarter  of  it, — and  the  property  of 
another  at  more  than  its  value, — at  double  or  treble  of  it, — accord- 
ing to  the  will  or  caprice  of  the  state.  To-day  railroad  companies 
are  under  its  ban,  and  the  discrimination  is  against  their  property. 
To-morrow  it  may  be  that  other  institutions  will  incur  its  displeas- 
ure. If  the  property  of  railroad  companies  may  be  thus  sought  out 
and  subjected  to  discriminating  taxation,  so,  at  the  will  of  the  state, 
by  a  change  of  its  constitution,  may  the  property  of  churches,  of  uni- 
versities, of  asylums,  of  savings  banks,  of  insurance  companies,  of 
rolling  and  flouring  mill  companies,  of  mining  companies,  indeed, 
of  any  corporate  companies  existing  in  the  state.  The  principle 
which  justifies  such  a  discrimination  in  assessment  and  taxation, 


192  LIMITATIONS  OF  THE  TAXING  POWER. 

where  one  of  the  owners  is  a  railroad  corporation  and  the  other  a 
natural  person,  would  also  sustain  it  where  both  owners  are  natural 
persons.  A  mere  change  in  the  state  constitution  would  effect  this  if 
the  federal  constitution  does  not  forbid  it.  Any  difference  between 
the  owners,  whether  of  age,  color,  race,  or  sex,  which  the  state  might 
designate,  would  be  a  sufficient  reason  for  the  discrimination.  It 
would  be  a  singular  comment  upon  the  weakness  and  character  of 
our  republican  institutions  if  the  valuation  and  consequent  taxation 
of  property  could  vary  according  as  the  owner  is  white,  or  black,  or 
yellow,  or  old,  or  young,  or  male,  or  female.  A  classification  of  val- 
ues for  taxation  upon  any  such  ground  would  be  abhorrent  to  all 
notions  of  equality  of  right  among  men.  Strangely,  indeed,  would 
the  law  sound  in  case  it  read  that  in  the  assessment  and  taxation  of 
property  a  deduction  should  be  made  for  mortgages  thereon  if  the 
property  be  owned  by  white  men  or  by  old  men,  and  not  deducted  if 
owned  by  black  men  or  by  young  men;  deducted  if  owned  by  lands- 
men, not  deducted  if  owned  by  sailors ;  deducted  if  owned  by  married 
men,  not  deducted  if  owned  by  bachelors;  deducted  if  owned  by  men 
doing  business  alone,  not  deducted  if  owned  by  men  doing  business 
in  partnerships  or  other  associations;  deducted  if  owned  by  trading 
corporations,  not  deducted  if  owned  by  churches  or  universities;  and 
so  on,  making  a  discrimination  wherever  there  was  any  difference  in 
the  character  or  pursuit  or  condition  of  the  owner.  To  levy  taxes 
upon  a  valuation  of  property  thus  made  is  of  the  very  essence  of 
tyranny,  and  has  never  been  done  except  by  bad  governments  in  evil 
times,  exercising  arbitrary  and  despotic  power. 

Until  the  adoption  of  the  fourteenth  amendment  there  was  no  re- 
straint to  be  found  in  the  constitution  of  the  United  States  against 
the  exercise  of  such  power  by  the  states 

The  first  section  of  the  fourteenth  amendment  places  a  limit  upon 
all  the  powers  of  the  state,  including  among  others,  that  of  taxation. 
After  stating  that  all  persons  born  or  naturalized  in  the  United 
States,  and  subject  to  the  jurisdiction  thereof,  are  citizens  of 
the  United  States  and  of  the  state  in  which  they  reside,  it  declares 
that  "no  state  shall  make  or  enforce  any  law  which  shall  abridge  the 
privileges  or  immunities  of  citizens,  of  the  United  States,  nor  shall 
any  state  deprive  any  person  (dropping  the  designation  'citizen')  of 
life,  liberty,  or  property,  without  due  process  of  law,  nor  deny  to  any 
person  within  its  jurisdiction  the  equal  protection  of  the  laws."  The 
amendment  was  adopted  soon  after  the  close  of  the  civil  war,  and 
undoubtedly  had  its  origin  in  a  purpose  to  secure  the  newly-made  cit- 
izens in  the  full  enjoyment  of  their  freedom.  But  it  is  in  no  respect 


SANTA  CLARA  CO.  V.  S.  P.  R.  R.  CO.  193 

limited  in  its  operation  to  them.  It  is  universal  in  its  application, 
extending  its  protective  force  over  all  men.  of  every  race  and  color, 
within  the  jurisdiction  of  the  states  throughout  the  broad  domain  of 
the  republic.  A  constitutional  provision  is  not  to  be  restricted  in  its 
application  because  designed  originally  to  prevent  an  existing  wrong. 

With  the  adoption  of  the  amendment  the  power  of  the  states  to  op- 
press any  one  under  any  pretense  or  in  any  form  was  forever  ended; 
and  henceforth  all  persons  within  their  jurisdiction  could  claim  equal 
protection  under  the  laws 

Unequal  taxation,  so  far  as  it  can  be  prevented,  is,  therefore,  with 
other  unequal  burdens,  prohibited  by  the  amendment.  There  un- 
doubtedly are,  and  always  will  be,  more  or  less  inequalities  in  the 
operation  of  all  general  legislation  arising  from  the  different  condi- 
tions of  persons  from  their  means,  business,  or  position  in  life, 
against  which  no  foresight  can  guard.  But  this  is  a  very  different 
thing,  both  in  purpose  and  effect,  from  a  carefully  devised  scheme  to 
produce  such  inequality;  or  a  scheme,  if  not  so  devised,  necessarily 
producing  that  result.  Absolute  equality  may  not  be  attainable,  but 
gross  and  designed  departures  from  it  will  necessarily  bring  the  leg- 
islation authorizing  it  within  the  prohibition.  The  amendment  is 
aimed  against  the  perpetration  of  injustice,  and  the  exercise  of  arbi- 
trary power  to  that  end.  The  position  that  unequal  taxation  is  not 
within  the  scope  of  its  prohibitory  clause  would  give  to  it  a  singu- 
lar meaning.  It  is  a  matter  of  history  that  unequal  and  discriminat- 
ing taxation,  leveled  against  special  classes,  has  been  the  fruitful 
means  of  oppressions,  and  the  cause  of  more  commotions  and  dis- 
turbance in  society,  of  insurrections  and  revolutions,  than  any  other 
cause  in  the  world. 


The  fact  to  which  counsel  allude,  that  certain  property  is  often 
exempted  from  taxation  by  the  states,  does  not  at  all  militate  against 
this  view  of  the  operation  of  the  fourteenth  amendment  in  forbid- 
ding the  imposition  of  unequal  burdens.  Undoubtedly,  since  the 
adoption  of  that  amendment,  the  power  of  exemption  is  much  more 
restricted  than  formerly;  but  that  it  may  be  extended  to  property 
used  for  objects  of  a  public  nature  is  not  questioned, — that  is,  where 
-the  property  is  used  for  the  promotion  of  the  public  well-being  and 
not  for  any  private  end 

That  the  propeeding  by  which  the  taxes  claimed  in  these  several 
actions  were  levied  against  the  railroad  companies  on  taxable  inter- 

13 


LIMITATIONS  OF  THE  TAXING  POWEE. 

ests  with  which  they  had  parted  was  not  due  process  of  law,  seems 
to  me  so  obviously  true  as  to  require  no  further  illustration.  .  .  . 
To  justify  these  discriminating  provisions,  and  maintain  the  action 
in  face  of  them,  the  plaintiffs  have  taken  positions  involving  doctrines 
which  sound  strangely  to  those  who  have  always  supposed  that  the 
constitutional  guaranties  extend  to  all  persons,  whatever  their  rela- 
tions, and  protect  from  spoliation  all  property,  by  whomsoever  held. 
These  positions  are  substantially  as  follows:  That  persons  cease  to 
be  within  the  protection  of  the  fourteenth  amendment,  and  as  such 
entitled  to  the  equal  protection  of  the  laws,  when  they  become  mem- 
bers of  a  corporation;  that  property,  when  held  by  persons  associated 
together  in  a  corporation,  is  subject  to  any  disposition  which  the 
state  may,  at  its  will,  see  fit  to  make;  that,  in  any  view,  the  property 
upon  which  the  taxes  claimed  were  levied  was  classified  by  its  use, 
taken  out  of  its  general  character  as  real  and  personal  property,  and 
thus  lawfully  subjected  to  special  taxation;  and  that  the  power  of 
the  state  cannot  be  questioned  by  the  Southern  Pacific  Railroad  Com- 
pany by  reason  of  the  covenant  in  its  mortgage.  These  positions  are 
not  advanced  by  counsel  in  this  language,  nor  with  the  baldness  here 
given;  but  they  mean  exactly  what  is  here  stated,  or  they  mean  noth- 
ing, as  will  clearly  appear  when  we  analyze  the  language  in  which 
they  are  presented. 

Private  corporations — and  under  this  head,  with  the  exception  of 
sole  corporations,  with  which  we  are  not  now  dealing,  all  corpora- 
tions other  than  those  which  are  public  are  included — private  cor- 
porations consist  of  an  association  of  individuals  united  for  some  law- 
ful purpose,  and  permitted  to  use  a  common  name  in  their  business 
and  have  succession  of  membership  without  dissolution.  .  .  .  The 
members  do  not,  because  of  such  association,  lose  their  rights  to  pro- 
tection, and  equality  of  protection.  They  continue,  notwithstanding, 
to  possess  the  same  right  to  life  and  liberty  as  before,  and  also  to 
their  property,  except  as  they  may  have  stipulated  otherwise.  As 
members  of  this  association — of  the  artificial  body,  the  intangible 
thing,  called  by  a  name  given  by  themselves — their  interests,  it  is 
true,  are  undivided,  and  constitute  only  a  right  during  the  continu- 
ance of  the  corporation  to  participate  in  its  dividends,  and  on  its 
dissolution,  to  a  proportionate  share  of  its  assets;  but  it  is  property, 
nevertheless,  and  the  courts  will  protect  it,  as  they  will  any  other 
property,  from  injury  or  spoliation. 

Whatever  affects  the  property  of  the  corporation — that  is,  of  all 
the  members  united  by  the  common  name — necessarily  affects  their 
interests So,  therefore,  whenever  a  provision  of  the 


SANTA  CLARA  CO.  V.  S.  P.  R.  R.  CO.  195 

constitution  or  of  a  law  guaranties  to  persons  protection  in  their 
property,  or  affords  to  them  the  means  for  its  protection,  or  prohib- 
its injurious  legislation  affecting  it,  the  benefits  of  the  provision  or 
law  are  extended  to  the  corporations;  not  to  the  name  under  which 
different  persons  are  united,  but  to  the  individuals  composing  the 
union.  The  courts  will  always  look  through  the  name  to  see  and 
protect  those  whom  the  name  represents 

But  it  is  urged  that  even  with  an  admission  of  these  positions, 
property  may  be  divided  into  classes  and  subjected  to  different  rates; 
that  such  classification  may  be  made  from  inherent  differences  in  the 
nature  of  different  parcels  of  property,  and  also  from  the  different, 
uses  to  which  the  same  property  may  be  applied;  and  it  is  sought  to 
place  the  tax  levied  in  these  cases  under  one  of  these  heads.  As  al- 
ready mentioned,  the  constitution  of  the  state  provides  with  respect 
to  property  that  it  shall  be  taxed  in  proportion  to  its  value;  it  pro- 
vides for  no  specific  tax  upon  any  article.  The  classification  of  prop- 
erty, either  from  its  distinctive  character  or  its  peculiar  use,  must 
be  made  within  the  rule  prescribing  taxation  according  to  value 
Real  and  personal  property,  differing  essentially  in  their  nature,  ma\ 
undoubtedly  be  subjected  to  different  rates;  real  property  may  be 
taxed  at  one  rate,  personal  property  at  another.  But  in  both  cases 
the  taxes  must  bear  a  definite  proportion  to  the  value  of  the  prop- 
erty. So,  also,  if  use  be  the  ground  of  classification,  for  which  a  dif- 
ferent rate  of  taxation  is  prescribed,  the  rate  must  still  bear  a  defi- 
nite proportion  to  the  value.  Now,  there  is  no  difference  in  the  rate 
of  taxation  prescribed  by  the  law  of  the  state  for  the  property  of 
railroad  corporations  and  that  prescribed  for  the  property  of  indi- 
viduals. There  is  only  one  rate  prescribed  for  all  property.  There 
is,  therefore,  as  said  in  the  San  Mateo  Suit,  no  case  presented  for 
the  application  of  the  doctrine  of  classification,  either  from  the  pecul- 
iar character  of  railroad  property  or  its  use. 

The  ground  of  complaint  is  not  that  any  different  rate  of  taxation 
is  adopted, — for  there  is  none, — but  that  a  different  rule  is  followed 
in  ascertaining  the  value  of  the  property  of  railroad  corporations,  as 
a  basis  of  taxation,  from  that  followed  in  ascertaining  the  value  of 
property  held  by  natural  persons.  In  estimating  the  value  in  one 
ease,  certain  elements  are  considered,  by  which  the  value  as  a  basis 
for  taxation  is  lessened;  in  estimating  the  value  in  another  case, 
those  elements  are  omitted,  by  which  the  valuation  is  proportionately 
increased.  All  property  of  railroad  corporations,  whether  used  in 
connection  with  the  operation  of  their  roads  or  entirely  distinct  from 


196  LIMITATIONS  OF  THE  TAXING  POWER. 

any  such  use,  is  estimated  without  regard  to  any  mortgages  thereon, 
while  the  property  of  natural  persons  is  valued  with  a  deduction  of 

such  mortgages 

,"•''    "-*.•••/•         •         •         •        •         •         •  / 

It  follows  from  the  views  expressed  that  findings  must  be  had  for 
the  defendants,  and  judgment  in  their  favor  entered  thereon. 

Although  corporations  are  persons  they  are  not  citizens  and  are  not  there- 
fore entitled  to  the  privileges  and  immunities  of  citizens ;  Paul  v.  Virginia, 
8  Wallace  (U.  S.)  183. 


MAGOUN  V.  ILLINOIS  TRUST  AND  SAVINGS  BANK. 

Supreme  Court  of  the  United  States.     October,  1897. 
170  United  States  283. 

Mr.  Justice  McKENNA,  after  stating  the  case  delivered  the  opinion 
of  the  court. 

This  brings  us  to  the  law  in  controversy.  The  appellant  attacks 
both  its  principles  and  its  provisions — its  principles  as  necessarily  ar- 
bitrary and  its  provisions  as  causing  discriminations  and  creating  ine- 
quality in  the  burdens  of  taxation. 

Is  the  act  open  to  this  criticism?  The  clause  of  the  Fourteenth 
Amendment  especially  invoked  is  that  which  prohibits  a  state  deny- 
ing to  any  citizen  the  equal  protection  of  the  laws.  What  satisfies 
this  equality  has  not  been  and  probably  never  can  be  precisely  de- 
fined. Generally  it  has  been  said  that  it  "only  requires  the  same 
means  and  methods  to  be  applied  impartially  to  all  the  constituents 
of  a  class  so  that  the  law  shall  operate  equally  and  uniformly  upon 
all  persons  in  similar  circumstances."  Kentucky  Railroad  Tax  Cases, 
115  U.  S.  321,  337.  It  does  not  prohibit  legislation  which  is  limited, 
either  in  the  objects  to  which  it  is  directed  or  by  the  territory  within 
which  it  is  to  operate.  It  merely  requires  that  all  persons  subjected 
to  such  legislation  shall  be  treated  alike  under  like  circumstances  and 
conditions,  both  in  the  privilege  conferred  and  the  liabilities  imposed. 
Hayes  v.  Missouri,  120  U.  S.  68.  Similar  citations  could  be  multi- 
plied. But  what  is  the  test  of  likeness  or  unlikeness  of  circumstances 
and  conditions  ?  These  expressions  have  almost  the  generality  of  the 
principle  they  are  used  to  expound,  and  yet  they  are  definite  steps 
to  precision  and  usefulness  of  definition,  when  connected  with  the 
facts  of  the  cases  in  which  they  are  employed.  With  these  for  illus- 


MAGOUN  V.  ILLINOIS  SAVINGS  BANK.  197 

i 

tration  it  may  be  safely  said  that  the  rule  prescribes  no  rigid  equal- 
ity and  permits  to  the  discretion  and  wisdom  of  the  State  a  wide 
latitude  as  far  as  interference  by  this  court  is  concerned.  Nor  with 
the  impolicy  of  a  law  has  it  concern.  Mr.  Justice  Field  said,  in 
Mobile  County  v.  Kimball,  102  U.  S.  691,  that  this  court  is  not  a 
harbor  in  which  can  be  found  a  refuge  from  ill-advised,  unequal  and 
oppressive  State  legislation.  And  he  observed  in  another  case:  "It  is 
hardly  necessary  to  say  that  hardship,  impolicy  or  injustice  of  State 
laws  is  not  necessarily  an  objection  to  their  constitutional  validity." 

The  rule,  therefore,  is  not  a  substitute  for  municipal  law;  it  only 
prescribes  that  that  law  have  the  attribute  of  equality  of  operation, 
and  equality  of  operation  does  not  mean  indiscriminate  operation  on 
persons  merely  as  such,  but  on  persons  according  to  their  relations. 
In  some  circumstances  it  may  not  tax  A  more  than  B,  but  if  A  be  of 
a  different  trade  or  profession  than  B,  it  may.  And  in  matters  not 
of  taxation,  if  A  be  a  different  kind  of  corporation  than  B,  it  may 
subject  A  to  a  different  rule  of  responsibility  to  servants  than  B, 
Missouri  Pacific  Railway  v.  Mackey,  127  U.  S.  205,  to  a  different 
measure  of  damages  than  B,  Minneapolis  and  St.  Louis  Railway  v. 
Beckwith,  129  U.  S.  26,  and  it  permits  special  legislation  in  all  of 
its  varieties.  Missouri  Pacific  Railway  v.  Mackey,  127  U.  S.  205; 
Minneapolis  and  St.  Louis  Railway  v.  Herrick,  127  U.  S.  210;  Dun- 
can v.  Missouri,  152  U.  S.  377. 

In  other  words,  the  State  may  distinguish,  select  and  classify  ob- 
jects of  legislation,  and  necessarily  this  power  must  have  a  wide 
range  of  discretion.  It  is  not  without  limitation,  of  course,  "Clear 
and  hostile  discriminations  against  particular  persons  and  classes, 
especially  such  as  are  of  unusual  character,  unknown  to  the  practice 
of  our  governments,  might  be  obnoxious  to  the  constitutional  pro- 
hibition," said  Mr.  Justice  Bradley,  in  Bell's  Gap  Railroad  v.  Penn- 
sylvania, 134  U.  S.  232,  237. 

And  Mr.  Justice  Brewer,  in  Gulf,  Colorado  &  Santa  Fe  Railway 
v.  Ellis,  165  U.  S.  150,  165,  after  a  careful  consideration  of  many 
cases,  said :  "It  is  apparent  that  the  mere  fact  of  classification  is  not 
sufficient  to  relieve  a  statute  from  the  reach  of  the  equality  clause  of 
the  Fourteenth  Amendment,  and  that  in  all  cases  it  must  appear  not 
only  that  a  classification  has  been  made,  but  also  that  it  is  one  based 
npon  some  reasonable  ground — some  difference  which  bears  a  just 
and  proper  relation  to  the  attempted  classification — and  is  not  a 
mere  arbitrary  selection." 

Two  principles,  therefore,  must  be  reconciled  in  the  Illinois  inher- 
itance law  if  it  is  to  be  sustained,  the  equality  of  protection  of  the 


198  LIMITATIONS  OF  THE  TAXING  POWEK. 

laws  guaranteed  by  the  Fourteenth  Amendment,  and  the  power  of 
the  State  to  classify  persons  and  property.  The  latter  principle 
needs  further  consideration.  What  test  is  there  of  the  reasonable- 
ness of  a  classification — of  one  based  upon  "some  difference  which 
bears  a  just  and  proper  relation  to  the  attempted  classification — and 
is  not  a  mere  arbitrary  selection?''  Legislation  special  in  character 
is  not  forbidden  by  it,  as  we  have  seen.  Treating  mechanics  as  a 
class,  and  giving  them  a  lien  for  the  amount  of  their  work,  has  been 
held  reasonable.  Charging  a  railroad  corporation  and  not  other  cor- 
porations or  persons  with  an  attorney's  fee  has  been  held  unreason- 
able,, yet  the  former  would  seem  to  be  as  much  an  exclusive  favor  as 
the  latter  an  exclusive  burden. 

Of  taxation,  and  the  case  at  bar  is  of  taxation,  Mr.  Justice  Brad- 
ley said  in  the  Bell's  Gap  Railroad  v.  Pennsylvania,  134  U.  S.  232, 
and  Mr.  Justice  Fuller  in  Giozza  v.  Tiernan,  148  U.  S.  657,  that 
the  fourteenth  amendment  was  not  intended  to  compel  the  state  to 
adopt  an  iron  rule  of  equal  taxation. 

There  is  therefore  no  precise  application  of  the  rule  of  reasonable- 
ness of  classification,  and  the  rule  of  equality  permits  many  practical 
inequalities.  And  necessarily  so.  In  a  classification  for  governmental 
purposes  there  cannot  be  an  exact  exclusion  or  inclusion  of  persons 
or  things.  Bearing  these  considerations  in  mind  we  can  solve  the 
questions  in  controversy. 

There  are  three  main  classes  in  the  Illinois  statute,  the  first  and 
second  being  based,  respectively,  on  lineal  and  collateral  relationship, 
to  the  testator  or  intestate,  and  the  third  being  composed  of  strangers 
.to  his  blood  and  distant  relatives.  The  latter  is  again  divided  into 
four  subclasses  dependent  upon  the  amount  of  the  estate  received. 
The  first  two  classes,  therefore,  depend  upon  substantial  differences, 
differences  which  may  distinguish  them  from  each  other  and  them  or 
either  of  them  from  the  other  class — differences,  therefore,  which 
"bear  a  just  and  proper  relation  to  the  attempted  classification" — the 
rule  expressed  in  the  Gulf,  Colorado  &  Santa  Fe  Railway  v.  Ellis, 
165  U.  S.  150.  And  if  the  constituents  of  each  class  are  affected 
alike,  the  rule  of  equality  prescribed  by  the  cases  is  satisfied.  In 
other  words,  the  law  operates  "equally  and  uniformly  upon  all  per- 
sons in  similar  circumstances." 

But  the  appellant  asserts  discrimination,  and  claims  that  the  ex- 
emptions produce  the  greatest  inequality.  As  stated  above,  the  Su- 
preme Court  of  the  State  of  Illinois  passed  on  and  sustained  the 
law  in  the  Drake  Case,  and  claiming  the  opinion  for  support,  the 


MAGUUX  V.  ILLINOIS  SAVINGS  BANK.  199 

appellant  contends  that  there  are  two  distinct  systems  and  princi- 
ples applied  in  the  act,  the  one  basing  the  tax  on  the  amount  received 
or  the  value  of  the  privilege  of  succession;  the  other  basing  the  tax 
upon  the  estate  owned  by  the  decedent,  irrespective  of  the  amount 
or  value  of  the  legacy.  And  discriminations  hence  resulting,  or 
rather  which  are  claimed  as  hence  resulting,  are  detailed. 

We,  however,  do  not  read  the  opinion  as  counsel  do.  In  answer 
to  the  objection  that  the  statute  offended  against  uniformity  or  pro- 
portion to  valuation  as  prescribed  by  the  constitution  of  Illinois,  the 
court  said : 

"That  statute  provides  certain  classes  of  property,  which  were  a 
part  of  an  estate,  shall  be  exempt  from  taxation  under  these  pro- 
visions; and  when  the  legislature  provides  other  classes  of  property, 
some  of  which  shall  pay  one  dollar  per  hundred,  others  two,  others 
three  and  others  four,  and  still  others  five,  and  again  others  six  dol- 
lars per  hundred,  six  different  classes  are  created  under  and  by  which 
a  tax  is  levied  by  valuation  on  the  right  of  succession  to  a  separate 
class  of  property. 

"The  class  on  which  a  tax  is  thus  levied  is  general,  uniform,  and 
pertains  to  all  species  of  property,  included  within  that  class.  A 
tax  which  affects  the  property  within  a  specific  class  is  uniform  as 
•to  the  class,  and  there  is  no  provision  of  the  constitution  which  pre- 
cludes legislative  action  from  assessing  a  tax  on  that  particular  class. 
By  this  act  of  the  legislature  six  classes  of  property  are  created,  here- 
tofore absolutely  unknown.  It  is  those  classes  of  property  depend- 
ing upon  the  estate  owned  l>y  one  dying  possessed  thereof  which  the 
State  may  regulate  as  to  its  descent  and  the  right  to  devise.  The 
tax  assessed  on  classes  thus  created  is  absolutely  uniform  on  all  the 
classes  upon  which  it  operates,  and  under  the  provisions  of  the  stat- 
ute is  to  be  determined  by  valuation,  so  that  every  person  and  cor- 
poration shall  pay  a  tax  in  proportion  to  the  value  of  his,  her  or  its 
property  inherited,  and  is  not  inconsistent  with  the  principle  of  tax- 
ation fixed  by  the  constitution,  and  is  clearly  within  the  sections  of 
the  constitution  quoted.  Xo  want  of  uniformity  with  one  living  who 
owns  property  can  be  urged  as  a  reason  why  the  statute  makes  an 
inconsistent  rule.  No  person  inherits  property  or  can  take  by  devise 
except  by  the  statute;  and  the  State,  having  power  to  regulate  thi? 
question,  may  create  classes  and  provide  for  uniformity  with  refer- 
ence to  classes  which  were  before  unknown." 

The  words  which  we  have  italicised  are  urged  to  support  appel- 
lant's contention,  but  it  is  manifest  that  they  do  not  do  so  when  con- 
sidered in  relation  to  that  which  precedes  and  follows  them,  and  it 


200  LIMITATIONS  OF  THE  TAXING  POWER. 

is,  therefore,  the  estates  which  descend  or  are  received  which  the 
court  decides  are  new  property,  and  which  are  to  pay  a  tax  in  pro- 
portion to  their  value. 

Appellant,  however,  says:  "The  progression  is  likewise  unneces- 
sarily arbitrary  if  we  take  the  view  that  the  tax  is  levied  on  the 

amount  received Under  such  an  assumption  those 

taking  the  larger  amounts  are  required  to  pay  a  larger  rate  on  the 
same  sums  upon  which  those  taking  smaller  sums  pay  a  smaller  rate) 
that  is  to  say,  one  who  receives  a  legacy  of  $10,000  pays  3  per  cent, 
or  $300,  thus  receiving  $9,700  net,  while  one  receiving  a  legacy  of 
$10,001  pays  4  per  cent  on  the  whole  amount,  or  $400.04,  thus  re- 
ceiving $9,600.96,  $99.04  less  than  the  one  whose  legacy  was  actually 
one  dollar  less  valuable.  This  method  is  applied  throughout  the 
class.  Other  examples  might  be  stated." 

The  reasoning  of  appellant  is  based  on  the  view  that  the  tax  is 
one  on  property  instead  of  one  on  the  succession,  as  held  by  the  Su- 
preme Court  of  the  State.  Being  on  the  succession,  the  court  further 
held,  as  we  have  seen,  that  the  latter  is  to  be  regarded  as  new  prop- 
erty, and  the  $20,000  and  other  property  not  taxed  or  not,  there- 
fore, exemptions. 

In  this  view  the  Illinois  court  is  in  harmony  with  the  majority  of 
other  courts  of  the  country.  We  concur  in  the  reasoning.  It  is  true 
that  the  amount  of  the  exemption  is  greater  in  the  Illinois  law  than 
in  any  other,  but  the  right  to  exempt  cannot  depend  on  that. 
Whether  it  shall  be  $20,000  as  in  Illinois  law  or  $10,000  as  in  that 
of  Massachusetts,  or  other  amounts  as  in  other  laws,  must  depend 
upon  the  judgment  of  the  legislature  of  each  State,  and  cannot  be 
subject  to  judicial  review.  If  such  review  could  ascertain  the  factors 
of  judgment  and  could  apply  them  with  indisputable  wisdom  to  the 
different  conditions  existing,  it  would  be  outside  of  its  province  to 
do  so.  That  manifestly  is  a  legislative,  not  a  judicial,  function. 

The  first  and  second  cases,  therefore,  of  the  statute  depend  upon 
substantial  distinctions  and  their  classifications  are  not  arbitrarv. 


The  provisions  of  the  statute  in  regard  to  the  tax  on  legacies  to 
strangers  to  the  blood  of  an  intestate  need  further  comment.  These 
provisions  are  as  follows: 

"On  each  and  every  one  hundred  dollars  of  the  clear  market  value 
of  all  property  and  at  the  same  rate  for  any  less  amount  on  all  es- 
tates of  ten  thousand  dollars  and  less,  three  dollars;  on  all  estates 
over  ten  thousand  dollars  and  not  exceeding  twenty  thousand  dol- 
lars, four  dollars;  on  all  estates  over  twenty  thousand  dollars,  and 


MAGOUN  V.  ILLINOIS  SAVINGS  BANK.  201 

not  exceeding  fifty  thousand  dollars,  five  dollars;  and  on  all  estates 
over  fifty  thousand  dollars,  six  dollars;  Provided,  that  an  estate  in 
the  above  case  which  may  be  valued  at  a  less  sum  than  five  hundred 
dollars  shall  not  be  subject  to  any  duty  or  tax." 

There  are  four  classes  created,  and  manifestly  there  is  equality  be- 
tween the  members  of  each  class.  Inequality  is  only  found  by  com- 
paring the  members  of  one  class  with  those  of  another.  It  is  illus- 
trated by  appellant  as  follows :  One  who  receives  a  legacy  of  $10,000. 
pays  3  per  cent  or  $300,  thus  receiving  $9,700  net ;  while  one  receiv- 
ing a  legacy  of  $10,001  pays  4  per  cent  on  the  whole  amount,  or 
$400.04,  thus  receiving  $9,600.96,  or  $99.04  less  than  the  one  whose 
legacy  was  actually  one  dollar  less  valuable.  This  method  is  applied 
throughout  the  class. 

These,  however,  are  conceded  to  be  extreme  illustrations,  and  we 
think,  therefore,  that  they  furnish  no  test  of  the  practical  operation 
of  the  classification.  When  the  legacies  differ  in  substantial  extent, 
if  the  rate  increases  the  benefit  increases  to  greater  degree. 

If  there  is  unsoundness  it  must  be  in  the  classification.  The 
members  of  each  class  are  treated  alike,  that  is  to  say,  all  who  in- 
herit $10,000  are  treated  alike, — all  who  inherit  any  other  sum  are 
treated  alike.  There  is  equality,  therefore,  within  the  classes.  If 
there  is  inequality  it  must  be  because  the  members  of  a  class  are 
arbitrarily  made  such  and  burdened  as  such  upon  no  distinctions  jus- 
tifying it.  This  is  claimed.  It  is  said  that  the  tax  is  not  in  propor- 
tion to  the  amount  but  varies  with  the  amounts  arbitrarily  fixed,  and 
hence  that  an  inheritance  of  $10,000  or  less  pays  3  per  cent,  and  that 
one  over  $10,000  pays  not  3  per  cent  on  $10,000  and  an  increased 
percentage  on  the  excess  over  $10,000,  but  an  increased  percentage 
on  the  $10,000  as  well  as  on  the  excess,  and  it  is  said,  as  we  have 
seen,  that  in  consequence  one  who  is  given  a  legacy  of  ten  thousand 
and  one  dollars  by  the  deduction  of  the  tax  receives  $99.04  less  than 
the  one  who  is  given  a  legacy  of  $10,000.  But  neither  case  can  be 
said  to  be  contrary  to  the  rule  of  equality  of  the  Fourteenth  Amend- 
ment. The  rule  does  not  require,  as  we  have  seen,  exact  equality  of 
taxation.  It  only  requires  that  the  law  imposing  it  shall  operate  on 
all  alike  under  the  same  circumstances.  The  tax  is  not  on  money; 
it  is  on  the  right  to  inherit;  and  hence  a  condition  of  inheritance, 
and  it  may  be  graded  according  to  the  value  of  that  inheritance. 
The  condition  is  not  arbitrary  because  it  is  determined  by  that  value ; 
it  is  not  unequal  in  operation  because  it  does  not  levy  the  same  per- 
centage on  every  dollar;  does  not  fail  to  treat  "all  alike  under  liko 
circumstances  and  conditions,  both  in  the  privilege  conferred  and  the 


202  LIMITATIONS  OF  THE  TAXING  POWER. 

liabilities  imposed."  The  jurisdiction  of  courts  is  fixed  by  amounts. 
The  right  of  appeal  is.  As  was  said  at  bar,  the  Congress  of  the 
United  States  has  classified  the  right  of  suitors  to  come  into  United1 
States  courts  by  amounts.  Regarding  these  alone,  there  is  the  same 
inequality  that  is  urged  against  the  classification  of  the  Illinois  law. 
All  license  laws  and  all  specific  taxes  have  in  them  an  element  of  ine- 
quality, nevertheless  they  are  universally  imposed  and  their  legality 
has  never  been  questioned.  We  think  the  classification  of  the  Illinois 
law  was  in  the  power  of  the  legislature  to  make,  and  the  decree  of 

the  Circuit  Court  is 

Affirmed. 

Mr.  Justice  BREWER  dissenting. 

As  to  the  propriety  of  progressive  inheritance  taxes  under  some  of  the 
state  constitutions  see  note  to  Matter  of  Mayor,  11  Johnson  77,  Infra.  See  also 
Knowlton  v.  Moore,  178  U.  S.  41,  Infra. 


IV.     DIRECT  TAXES. 
SPRINGER  V.  UNITED  STATES. 

Supreme  Court  of  the  United  States.    October,  1880. 
102  United  States  586. 

Mr.  Justice  SWAYNE delivered  the  opinion  of  the 

court. 

The  central  and  controlling  question  in  this  case  is  whether  the 
tax  which  was  levied  on  the  income,  gains,  and  profits  of  the  plaintiif 
in  error,  as  set  forth  in  the  record,  and  by  pretended  virtue  of  the 
acts  of  Congress  and  parts  of  acts  therein  mentioned,  is  a  direct  tax. 
It  is  fundamental  with  respect  to  the  rights  of  the  parties  and  result 
of  the  case 

The  clauses  of  the  constitution  bearing  on  the  subject  are  a^ 
follows : — 

"Representatives  and  direct  taxes  shall  be  apportioned  among  the 
several  States  which  may  be  included  within  this  Union,  according  to 
their  respective  numbers,  which  shall  be  determined  by  adding  to 
the  whole  number  those  bound  to  service  for  a  term  of  years,  and 

excluding  Indians  not  taxed,  three-fifths  of  all  other  persons 

No  capitation  or  other  direct  tax  shall  be  laid  unless  in  pro- 
portion to  the  census  hereinbefore  directed  to  be  taken." 


Sl'UIXGEH  V.  UNITED  STATES.  :>(>:', 

Was  the  tax  here  in  question  a  direct  tax?  If  it  was,  not  hav- 
ing been  laid  according  to  the  requirements  of  the  constitution,  it 
must  be  admitted  that  the  laws  imposing  it,  and  the  proceedings 
taken  under  them  by  the  assessor  and  collector  for  its  imposition 
and  collection,  were  all  void. 

There  are  four  adjudications  by  this  court  to  be  considered.  They 
have  an  important,  if  not  a  conclusive,  application  to  the  case  in 
hand.  In  Ilylton  v.  United  States,  supra  [3  Dallas,  171],  a  tax  had 
been  laid  upon  pleasure-carriages.  The  plaintiff  in  error  insisted 
that  the  tax  was  void,  because  it  was  a  direct  tax,  and  had  not  been 
apportioned  among  the  States  as  required  by  the  Constitution,  where 
such  taxes  are  imposed.  The  case  was  argued  on  both  sides  by 
counsel  of  eminence  and  ability.  It  was  heard  and  determined  by 
four  judges, — Wilson.  Paterson,  Chase,  and  Iredell.  The  three  first 
named  had  been  distinguished  members  of  the  constitutional  conven- 
tion. Wilson  was  on  the  committee  that  reported  the  completed 
draft  of  the  instrument,  and  warmly  advocated  its  adoption  in  the 
State  convention  of  Pennsylvania.  The  fourth  was  a  member  of  the 
convention  of  Xorth  Carolina  that  adopted  the  Constitution.  The 
case  was  decided  in  1795.  The  judges  were  unanimous.  The  tax 
was  held  not  to  be  a  direct  tax.  Each  judge  delivered  a  separate 
opinion.  Their  judgment  was  put  on  the  ground  indicated  by  Mr. 
Justice  Chase,  in  the  following  extract  from  his  opinion: 

"It  appears  to  me  that  a  tax  on  carriages  cannot  be  laid  by  the 
rule  of  apportionment  without  very  great  inequality  and  injustice. 
For  example,  suppose  two  States  equal  in  census  to  pay  eighty  thou- 
sand dollars  each  by  a  tax  on  carriages  of  eight  dollars  on  every  car- 
riage; and  in  one  State  there  are  one  hundred  carriages  and  in  the 
other  one  thousand.  The  owners  of  carriages  in  one  State  would 
pay  ten  times  the  tax  of  owners  in  the  other.  A,  in  one  State,  would 
pay  for  his  carriage  eight  dollars;  but  B,  in  the  other  State,  would 
pay  for  his  carriage  eighty  dollars/' 

It  was  well  held  that  where  such  evils  would  attend  the  appor- 
tionment of  a  tax,  the  Constitution  could  not  have  intended  that  an 
apportionment  should  be  made.  This  view  applies  with  even  greater 
force  to  the  tax  in  question  in  this  case.  Where  the  population  is 
large  and  the  incomes  are  few  and  small,  it  would  be  intolerably 
oppressive. 

The  difference  in  the  ability  of  communities,  without  reference  to 
numbers,  to  pay  any  taxes  is  forcibly  remarked  upon  by  McCulloh 


204  LIMITATIONS  OF  THE  TAXING  POWER. 

in  his  article  on  taxation  in  the  Encyclopaedia  Britannica,  vol.  xxi, 
(old  ed.),  P.  75. 

Mr.  Justice  Chase  said  further,  "That  he  would  give  no  judicial 
opinion  upon  the  subject,  but  that  he  was  inclined  to  think  that 
direct  taxes  contemplated  by  the  Constitution  were  only  two, — a  cap- 
itation tax  and  a  tax  on  land." 

Mr.  Justice  Iredell  said:  "Perhaps  a  direct  tax,  in  the  sense  of 
the  Constitution,  can  mean  nothing  but  a  tax  on  something  insep- 
arably annexed  to  the  soil A  land  or  poll  tax  may 

be  considered  of  this  description.  The  latter  is  to  be  so  considered, 
particularly  under  the  present  Constitution,  on  account  of  the  slaves 
in  the  Southern  States,  who  give  a  ratio  in  the  representation  in  the 
population  of  three  to  five." 

Mr.  Justice  Paterson  said,  he  never  entertained  a  doubt  "that  the 
principal,  he  would  not  say  the  only,  .objects  contemplated  by  the 
Constitution  as  falling  within  the  rule  of  apportionment,  were  a 
capitation  tax  and  a  tax  on  land."  From  these  views  the  other 
judges  expressed  no  dissent. 

"Ellsworth,  the  Chief  Justice,  sworn  into  office  that  morning,  not 
having  heard  the  whole  argument,  declined  taking  any  part  in  the 
decision."  8  Wall.  545.  Gushing,  from  ill-health  did  not  sit  in  the 
case.  It  has  been  remarked  that  if  they  had  been  dissatisfied  with 
the  result,  the  question  involved  being  so  important,  doubtless  a  re- 
argument  would  have  been  had. 

In  Pacific  Insurance  Co.  v.  Soule,  7  Wall.  433,  the  taxes  in  ques- 
tion were  upon  the  receipts  of  such  companies  from  premiums  and 
assessments,  and  upon  all  sums  made  or  added,  during  the  year,  to 
their  surplus  or  contingent  funds.  This  court  held  unanimously  that 
the  taxes  were  not  direct  taxes,  and  that  they  were  valid. 

In  Veazie  Bank  v.  Fenno,  supra  [8  Wall.  533],  the  tax  which 
came  under  consideration  was  one  of  ten  per  cent  upon  the  notes  of 
State  banks  paid  out  by  other  banks,  State  or  national.  The  same 
conclusions  were  reached  by  the  court  as  in  the  preceding  case.  Mr. 
Chief  Justice  Chase  delivered  the  opinion  of  the  court.  In  the 
course  of  his  elaborate  examination  of  the  subject  he  said,  "It  may 
be  rightly  affirmed  that,  in  the  practical  construction  of  the  Consti- 
tution by  Congress,  direct  taxes  have  been  limited  to  taxes  on  land 
and  appurtenances  and  taxes  on  polls,  or  capitation  taxes." 

In  Scholey  v.  Rew  (23  Wall.  331),  the  tax  involved  was  a  suc- 
cession tax,  imposed  by  the  acts  of  Congress  of  June  30,  1864,  and 
July  13,  1866.  It  was  held  that  the  tax  was  not  a  direct  tax,  and 
that  it  was  constitutional  and  valid.  In  delivering  the  opinion  of 


SPRINGER  V.  UNITED  STATES.  205 

the  court,  Mr.  Justice  Clifford,  after  remarking  that  the  tax  there 
in  question  was  not  a  direct  tax,  said:  "Instead  of  that,  it  is 
plainly  an  excise  tax  or  duty,  authorized  by  sect.  1,  art.  8,  of  the 
Constitution,  which  vests  the  power  in  Congress  to  lay  and  collect 
taxes,  duties,  imposts,  and  excises  to  pay  the  debts  and  provide  for 
the  common  defence  and  public  welfare." 

He  said  further:  "Taxes  on  houses,  lands,  and  other  permanent 
real  estate  have  always  been  deemed  to  be  direct  taxes,  and  capita- 
tion taxes,  by  the  express  words  of  the  Constitution,  are  within  the 
same  category;  but  it  has  never  been  decided  that  any  other  legal 
exactions  for  the  support  of  the  Federal  government  fall  within  the 
condition  that  unless  laid  in  proportion  to  numbers  the  assessment 
is  invalid." 

All  these  cases  are  undistinguishable  in  principle  from  the  case 
now  before  us,  and  they  are  decisive  against  the  plaintiff  in  error. 

The  question,  what  is  a  direct  tax,  is  one  exclusively  in  American 
jurisprudence.  The  text-writers  of  the  country  are  in  entire  accord 
upon  the  subject. 

Mr.  Justice  Story  says  all  taxes  are  usually  divided  into  two 
classes, — those  which  are  direct  and  those  which  are  indirect, — and 
that  "under  the  former  denomination  are  included  taxes  on  land 
and  real  property,  and,  under  the  latter,  taxes  on  consumption."  1 
Const.,  sect.  950. 

Chancellor  Kent,  speaking  of  the  case  of  Hylton  v.  United  States, 
says:  "The  better  opinion  seems  to  be  that  the  direct  taxes  con- 
templated by  the  Constitution  were  only  two;  viz,  a  capitation  or 
poll  tax  and  a  tax  on  land."  1  Com.  257.  See  also  Cooley,  Tax- 
ation, p.  5,  note  2;  Pomeroy,  Const.  Law,  157;  Sharwood's  Black- 
stone,  308,  note;  Rawle,  Const.  30;  Sergeant,  Const.  305. 

We  are  not  aware  that  any  writer,  since  Hylton  v.  United  States 
was  decided,  has  expressed  a  view  of  the  subject  different  from  that 
of  these  authors. 

Our  conclusions  are,  that  direct  taxes,  within  the  meaning  of  the 
Constitution,  are  only  capitation  taxes,  as  expressed  in  that  instru- 
ment, and  taxes  on  real  estate;  and  that  the  tax  of  which  the 
plaintiff  in  error  complains  is  within  the  category  of  an  excise  or 
duty.  Pomeroy,  Const.  Law,  177;  Pacific  Insurance  Co.  v.  Soule, 
and  Scholey  v.  Rew,  supra. 

Against  the  considerations,  in  one  scale,  in  favor  of  these  propo- 
sitions, what  has  been  placed  in  the  other,  as  a  counterpoise?  Our 
answer  is,  certainly  nothing  of  such  weight,  in  our  judgment,  as  to 
require  any  special  reply. 


206  LIMITATIONS  OF  THE  TAXING  POWER. 

The  numerous  citations  from  the  writings  of  foreign  political 
economists,  made  by  the  plaintiff  in  error,  are  sufficiently  answered 
by  Hamilton  in  his  brief,  before  referred  to. 

Judgment  affirmed. 


POLLOCK  V.  FARMERS'  LOAN  AND  TRUST  CO. 

Supreme  Court  of  the  United  States.    May,  1895. 
158  United  States,  601. 

These  cases  were  decided  on  the  8th  of  April,  1895,  157  U.   S. 
429.     Thereupon  the  appellants  filed  a  petition  for  a  rehearing. 
Mr.  Chief  Justice  FULLER  delivered  the  opinion  of  the  court. 

The  Constitution  divided  Federal  taxation  into  two 

great  classes,  the  class  of  direct  taxes,  and  the  class  of  duties,  im- 
posts, and  excises;  and  prescribed  two  rules  which  qualified  the 
grant  of  power  as  to  each  class. 

Our  previous  decision  was  confined  to  the  consideration  of  the 
validity  of  the  tax  on  the  income  from  real  estate,  and  on  the  in- 
come from  municipal  bonds.  The  question  thus  limited  was  whether 
such  taxation  was  direct  or  not,  in  the  meaning  of  the  Constitution; 
and  the  court  went  no  farther,  as  to  the  tax  on  the  income  from 
real  estate,  than  to  hold  that  it  fell  within  the  same  class  as  the 
source  whence  the  income  was  derived,  that  is,  that  a  tax  upon  the 
realty  and  a  tax  upon  the  receipts  therefrom  were  alike  direct;  while 
as  to  the  income  from  municipal  bonds,  that  could  not  be  taxed  be- 
cause of  want  of  power  to  tax  the  source,  and  no  reference  was  made 
to  the  nature  of  the  tax  as  being  direct  or  indirect. 

We  are  now  permitted  to  broaden  the  field  of  inquiry,  and  to  de- 
termine which  of  the  two  great  classes  a  tax  upon  a  person's  entire 
income,  whether  derived  from  rents,  or  products,  or  otherwise,  of 
real  estate,  or  from  bonds,  stocks,  or  other  forms  of  personal  prop- 
erty, belongs;  and  we  are  unable  to  conclude  that  the  enforced  sub- 
traction from  the  yield  of  all  the  owner's  real  or  personal  property, 
in  the  manner  prescribed  is  so  different  from  a  tax  upon  the  prop- 
erty itself,  that  it  is  not  a  direct,  but  an  indirect  tax,  in  the  mean- 
ing of  the  Constitution. 

We  know  of  no  reason  for  holding  otherwise  than  that  the  words; 


POLLOCK  V.  FAEMEBS'  LOAX  AXD  TBUST  CO.     20T 

"direct  taxes,"  on  the  one  hand,  and  "duties,  imposts  and  excises," 
on  the  other,  were  used  in  the  Constitution  in  their  natural  and  ob- 
vious sense.  Nor,  in  arriving  at  what  those  terms  embrace,  do  we 
perceive  any  ground  for  enlarging  them  beyond,  or  narrowing  them 
within,  their  natural  and  obvious  import  at  the  time  the  Constitu- 
tion was  framed  and  ratified. 

The  reasons  for  the  clauses  of  the  Constitution  in  respect  of  direct 
taxation  are  not  far  to  seek.  The  States,  respectively,  possessed 
plenary  powers  of  taxation.  They  could  tax  the  property  of  their 
citizens  in  such  manner  and  to  such  extent  as  they  saw  fit;  they 
had  unrestricted  power  to  impose  duties  or  imposts  on  imports  from 
abroad,  and  excises  on  manufactures,  consumable  commodities,  or 
otherwise.  They  gave  up  the  great  sources  of  revenue  derived  from 
commerce;  they  retained  the  concurrent  power  of  levying  excises, 
and  duties  if  covering  anything  other  than  excises ;  but  in  respect  of 
them  the  range  of  taxation  was  narrowed  by  the  power  granted  over 
interstate  commerce,  and  by  the  danger  of  being  put  at  disadvan- 
tage in  dealing  with  excises  on  manufactures.  They  retained  the 
power  of  direct  taxation,  and  to  that  they  looked  as  their  chief  re- 
source; but  even  in  respect  of  that,  they  granted  the  concurrent 
power,  and  if  the  tax  were  placed  by  both  governments  on  the  same 
subject,  the  claim  of  the  United  States  had  preference.  Therefore, 
they  did  not  grant  the  power  of  direct  taxation  without  regard  to 
their  own  condition  and  resources  as  States;  but  they  granted  the 
power  of  apportioned  direct  taxation,  a  power  just  as  efficacious  to 
serve  the  needs  of  the  general  government,  but  securing  to  the 
States  the  opportunity  to  pay  the  amount  apportioned,  and  to  recoup 
from  their  own  citizens  in  the  most  feasible  way,  and  in  harmony 
with  their  systems  of  local  self-government.  If  in  the  changes  of 
wealth  and  population  in  particular  States,  apportionment  produced 
inequality,  it  was  an  inequality  stipulated  for,  just  as  the  equal  rep- 
resentation of  the  States,  however  small,  in  the  Senate,  was  stipu- 
lated for.  The  Constitution  ordains  affirmatively  that  each  State 
shall  have  two  members  of  that  body,  and  negatively  that  no  State 
shall  by  amendment  be  deprived  of  its  equal  suffrage  in  the  Senate 
without  its  consent.  The  Constitution  ordains  affirmatively  that 
representatives  and  direct  taxes  shall  be  apportioned  among  the  sev- 
eral States  according  to  numbers,  and  negatively  that  no  direct  tax 
shall  be  laid  unless  in  proportion  to  the  enumeration. 

The  founders  anticipated  that  the  expenditures  of  the  States,  their 
counties,  cities,  and  towns,  would  chiefly  be  met  by  direct  taxation 


208  LIMITATIONS  OF  THE  TAXING  POWEE. 

on  accumulated  property,  while  they  expected  that  those  of  the  Fed- 
eral government  would  be  for  the  most  part  met  by  indirect  taxes. 
And  in  order  that  the  power  of  direct  taxation  by  the  general  gov- 
ernment should  not  be  exercised,  except  on  necessity;  and,  when  the 
necessity  arose,  should  be  so  exercised  as  to  leave  the  States  at  lib- 
erty to  discharge  their  respective  obligations,  and  should  not  be  so 
exercised,  unfairly  and  discriminately,  as  to  particular  States  or 
otherwise,  by  a  mere  majority  vote,  possibly  of  those  whose  con- 
stituents were  intentionally  not  subjected  to  any  part  of  the  burden, 
the  qualified  grant  was  made.  Those  who  made  it  knew  that  the 
power  to  tax  involved  the  power  to  destroy,  and  that,  in  the  lan- 
guage of  Chief  Justice  Marshall,  in  McCulloch  v.  Maryland,  "the 
only  security  against  the  abuse  of  this  power  is  found  in  the  struc- 
ture of  the  government  itself.  In  imposing  a  tax,  the  legislature 
acts  upon  its  constituents.  This  is,  in  general,  a  sufficient  security 
against  erroneous  and  oppressive  taxation."  4  Wheat.  428.  And 
they  retained  this  security  by  providing  that  direct  taxation  and  rep- 
resentation in  the  lower  house  of  Congress  should  be  adjusted  on  the 
same  measure. 

Moreover,  whatever  the  reasons  for  the  constitutional  provisions, 
there  they  are,  and  they  appear  to  us  to  speak  in  plain  language 

It  is  said  that  a  tax  on  the  whole  income  of  property  is  not  a 
direct  tax  in  the  meaning  of  the  Constitution,  but  a  duty,  and,  as 
a  duty,  leviable  without  apportionment,  whether  direct  or  indirect. 
We  do  not  think  so.  Direct  taxation  was  not  restricted  in  one 
breath,  and  the  restriction  blown  to  the  winds  in  another. 

Cooley  (On  Taxation,  p.  3)  says  that  the  word  "duty"  ordinarily 
"means  an  indirect  tax  imposed  on  the  importation,  exportation,  or 
consumption  of  goods;"  having  "a  broader  meaning  than  custom,, 
which  is  a  duty  imposed  on  imports  or  exports,"  that  "the  term 
impost  also  signifies  any  tax,  tribute  or  duty,  but  it  is  seldom  ap- 
plied to  any  but  the  indirect  taxes.  An  excise  duty  is  an  inland  im- 
post, levied  upon  articles  of  manufacture  or  sale,  and  also  upon 
licenses  to  pursue  certain  trades  or  to  deal  in  certain  commodities." 

In  the  Constitution,  the  words  "duties,  imposts  and  excises"  are 
put  in  antithesis  to  direct  taxes.  Gouverneur  Morris  recognized  this 
in  his  remarks  in  modifying  his  celebrated  motion,  as  did  Wilson  in 
approving  of  the  motion  as  modified.  5  Ell.  Deb.  (Madison  Papers), 
302.  And  Mr.  Justice  Story,  in  his  Commentaries  on  the  Constitu- 
tion, (§  952),  expresses  the  view  that  it  is  not  unreasonable  to  pre- 
sume that  the  word  "duties"  was  used  as  equivalent  to  "customs" 
or  "imposts"  by  framers  of  the  Constitution,  since  in  other  clauses 


POLLOCK  V.  FARMERS'  LOAN  AND  TRUST  CO.     209 

it  was  provided  that  "No  tax  or  duty  shall  be  laid  on  articles  ex- 
ported from  any  State,"  and  that  "No  state  shall,  without  the  con- 
sent of  Congress,  lay  any  imposts  or  duties  on  imports  or  exports, 
except  what  may  be  absolutely  necessary  for  executing  its  inspec- 
tion laws;"  and  he  refers  to  a  letter  of  Mr.  Madison  to  Mr.  Cabell, 
of  September  18,  1828,  to  that  effect.  3  Madison's  Writings  636. 

In  this  connection  it  may  be  useful,  though  at  the  risk  of  repeti- 
tion, to  refer  to  the  views  of  Hamilton  and  Madison  as  thrown  into 
relief  in  the  pages  of  the  Federalist,  and  in  respect  of  the  enactment 
of  the  carriage  tax  act,  and  again  to  briefly  consider  the  Hylton 
Case,  3  Dall.  171,  so  much  dwelt  on  in  argument. 

The  act  of  June  5,  1794,  c.  45,  1  Stat.  373,  laying  duties  upon 
carriages  for  the  conveyance  of  persons,  was  enacted  in  a  time  of 
threatened  war.  Bills  were  then  pending  in  Congress  to  increase 
the  military  force  of  the  United  States,  and  to  authorize  increased 
taxation  in  various  directions.  It  was,  therefore,  as  much  a  part  of 
a  system  of  taxation  in  war  times,  as  was  the  income  tax  of  the  war 
of  the  rebellion.  The  bill  passed  the  House  on  the  twenty-ninth 
of  May,  apparently  after  a  very  short  debate.  Mr.  Madison  and  Mr. 
Ames  are  the  only  speakers  on  that  day  reported  in  the  Annals. 
"Mr.  Madison  objected  to  this  tax  on  carriages  as  an  unconstitu- 
tional tax;  and,  as  an  unconstitutional  measure,  he  would  vote 
against  it."  Mr.  Ames  said :  "It  was  not  to  be  wondered  at  if  he, 
coming  from  so  different  a  part  of  the  country,  should  have  a  differ- 
ent idea  of  this  tax  from  the  gentleman  who  spoke  last.  In  Massa- 
chusetts, this  tax  had  long  been  known;  and  there  it  was  called  an 
excise.  It  was  difficult  to  define  whether  a  tax  is  direct  or  not.  He 
had  satisfied  himself  that  this  was  not  so."  Annals,  3d  Cong.  730. 

On  the  first  of  June,  1794,  Mr.  Madison  wrote  to  Mr.  Jefferson : 
"The  carriage  tax,  which  only  struck  at  the  Constitution,  has  passed 
the  House  of  Representatives."  3  Madison's  Writings  18.  The  bill 
then  went  to  the  Senate,  where,  on  the  third  day  of  June,  it  "was 
considered  and  adopted."  Annals,  3d  Cong.  119,  and  on  the  fol- 
lowing day  it  received  the  signature  of  President  Washington.  On 
the  same  third  day  of  June  the  Senate  considered  "an  act  laying 
certain  duties  upon  snuff  and  refined  sugar:"  "an  act  making  fur- 
ther provisions  for  securing  and  collecting  the  duties  on  foreign  and 
domestic  distilled  spirits,  stills,  wines,  and  teas;"  "an  act  for  the 
more  effectual  protection  of  the  Southwestern  frontier;"  "an  act 
laying  additional  duties  on  licenses  for  selling  wines  and  foreign 
distilled  spirituous  liquors  by  retail:"  and  "an  act  laying  duties  on 
property  sold  at  auction." 
14 


210  LIMITATIONS  OF  THE  TAXING  POWEE. 

It  appears  then  that  Mr.  Madison  regarded  the  carriage  tax  as 
unconstitutional,  and  accordingly  gave  his  vote  against  it,  although 
it  was  to  a  large  extent,  if  not  altogether,  a  war  measure. 

Where  did  Mr.  Hamilton  stand?  At  that  time  he  was  Secretary 
of  the  Treasury,  and  it  may  therefore  be  assumed,  without  proof,  that 
he  favored  the  legislation.  But  upon  what  ground?  He  must,  of 
course,  have  come  to  the  conclusion  that  it  was  not  a  direct  tax. 
Did  he  agree  with  Fisher  Ames,  his  personal  and  political  friend, 
that  the  tax  was  an  excise?  The  evidence  is  overwhelming  that  he 
did. 

In  the  thirtieth  number  of  the  Federalist,  after  depicting  the  help- 
less and  hopeless  condition  of  the  country  growing  out  of  the  ina- 
bility of  the  confederation  to  obtain  from  the  States  the  moneys 
assigned  to  its  expenses,  he  says:  "The  more  intelligent  adversaries 
of  the  new  Constitution  admit  the  force  of  this  reasoning;  but  they 
qualify  their  admission,  by  a  distinction  between  what  they  call  in- 
ternal and  external  taxations.  The  former  they  would  reserve  to  the 
state  governments;  the  latter,  which  they  explain  into  commercial 
imposts,  or  rather  duties  on  imported  articles,  they  declare  them- 
selves willing  to  concede  to  the  Federal  head."  In  the  thirty-sixth 
number,  while  still  adopting  the  division  of  his  opponents,  he  says: 
"The  taxes  intended  to  be  comprised  under  the  general  denomina- 
tion of  internal  taxes,  may  be  subdivided  into  those  of  the  direct  and 

those  of  the  indirect  kind As  to  the  latter,  by  which 

must  be  understood  duties  and  excises  on  articles  of  consumption, 
one  is  at  a  loss  to  conceive,  what  can  be  the  nature  of  the  difficulties 
apprehended."  Thus  we  find  Mr.  Hamilton,  while  writing  to  induce 
the  adoption  of  the  Constitution,  first,  dividing  the  powers  of  tax- 
ation into  external  and  internal,  putting  into  the  former  the  power 
of  imposing  duties  on  imported  articles  and  into  the  latter  all  re- 
maining powers;  and,  second,  dividing  the  latter  into  direct  and 
indirect,  putting  into  the  latter,  duties  and  excises  on  articles  of  con- 
sumption. 

It  seems  to  us  to  inevitably  follow  that  in  Mr.  Hamilton's  judg- 
ment at  that  time  all  internal  taxes  except  duties  and  excises  on 
articles  of  consumption,  fell  into  the  category  of  direct  taxes. 

Did  he  in  supporting  the  carriage  tax  bill,  change  his  views  in 
this  respect?  His  argument  in  the  Ilylton  case  in  support  of  the 
law  enables  us  to  answer  this  question.  It  was  not  reported  by  Dal- 
las, but  was  published  in  1851  by  his  son  in  the  edition  of  all  Ham- 
ilton's writings  except  the  Federalist.  After  saying  that  we  shall 
seek  in  vain  for  any  legal  meaning  of  the  respective  terms  "direct 


POLLOCK  V.  FARMERS'  LOAX  AND  TRUST  CO.     211 

and  indirect  taxes,"  and  after  forcibly  stating  the  impossibility  of 
collecting  the  tax  if  it  is  to  be  considered  a  direct  tax,  he  says, 
doubtingly:  "The  following  are  presumed  to  be  the  only  direct 
taxes.  Capitation  or  poll  taxes.  Taxes  on  lands  and  buildings. 
General  assessments,  whether  on  the  whole  property  of  individuals, 
or  on  their  whole  real  or  personal  estate;  all  else  must  of  necessity 
be  considered  as  indirect  taxes."  "Duties,  imposts  and  excises  appear 
to  be  contradistinguished  from  taxes."  "If  the  meaning  of  the  word 
excise  is  to  be  sought  in  the  British  statutes,  it  will  be  found  to  in- 
clude the  duty  on  carriages,  which  is  there  considered  as  an  excise/' 
"Where  so  important  a  distinction  in  the  Constitution  is  to  be  real- 
ized, it  is  fair  to  seek  the  meaning  of  terms  in  the  statutory  lan- 
guage of  that  country  from  which  our  jurisprudence  is  derived."  7 
Hamilton's  Works,  848.  Mr.  Hamilton,  therefore,  clearly  supported 
the  law  which  Mr.  Madison  opposed,  for  the  same  reason  that  his 
friend  Fisher  Ames  did,  because  it  was  an  excise,  and  as  such  was 
specifically  comprehended  by  the  Constitution.  Any  loose  expres- 
sions in  definition  of  the  word  "direct,"  so  far  as  conflicting  with 
his  well  considered  views  in  the  Federalist,  must  be  regarded  as  the 
liberty  which  the  advocate  usually  thinks  himself  entitled  to  take 
with  his  subject.  He  gives,  however,  it  appears  to  us,  a  definition 
which  covers  the  question  before  us.  A  tax  upon  one's  whole  income 
is  a  tax  upon  the  annual  receipts  from  his  whole  property,  and  a.s 
such  falls  within  the  same  class  as  a  tax  upon  that  property,  and  is 
a  direct  tax,  in  the  meaning  of  the  Constitution.  And  Mr.  Hamil- 
ton, in  his  report  on  the  public  credit,  in  referring  to  contracts  with 
citizens  of  a  foreign  country,  said:  "This  principle,  which  seems 
critically  correct,  would  exempt  as  well  the  income  as  the  capital  of 
the  property.  It  protects  the  use,  as  effectually  as  the  thing.  What, 
in  fact,  is  property,  but  a  fiction,  without  the  beneficial  use  of  it? 
In  many  cases,  indeed,  the  income  or  annuity  i>  the  property  itself.'' 
3  Hamilton's  Works,  34. 

We  think  there  is  nothing  in  the  Hylton  case  in  conflict  with  the 
foregoing. 

What  was  decided  in  the  Hylton  case  was, that  a 

tax  on  carriages  was  an  excise,  and,  therefore,  an  indirect  tax.  The 
contention  of  Mr.  Madison  in  the  House  was  only  so  far  disturbed 
by  it,  that  the  court  classified  it  where  he  himself  would  have  held 
it  constitutional,  and  he  subsequently  as  President  approved  of  a 
similar  act.  3  Stat.  40.  The  contention  of  Mr.  Hamilton  in  the 
Federalist  was  not  disturbed  by  it  in  the  least.  In  our  judgment, 


212  LIMITATIONS  OF  THE  TAXING  POWER. 

the  construction  given  to  the  Constitution  by  the  authors  of  the  Fed- 
eralist (the  five  numbers  contributed  by  Chief  Justice  Jay  related 
to  the  danger  from  foreign  force  and  influence,  and  to  the  treaty 
making  power)  should  not  and  cannot  be  disregarded. 

The  Constitution  prohibits  any  direct  tax,  unless  in  proportion  to 
numbers  as  ascertained  by  the  census;  and,  in  the  light  of  the  cir- 
cumstances to  which  we  have  referred,  is  it  not  an  evasion  of  that 
prohibition  to  hold  that  a  general  unapportioned  tax,  imposed  upon 
all  property  owners  as  a  body  for  or  in  respect  of  their  property,  is 
not  direct,  in  the  meaning  of  the  Constitution,  because  confined  to 
the  income  therefrom? 

Whatever  the  speculative  views  of  political  economists  or  revenue 
reformers  may  be,  can  it  properly  be  held  that  the  Constitution, 
taken  in  its  plain  and  obvious  sense,  and  with  due  regard  to  the 
circumstances  attending  the  formation  of  the  government,  authorizes 
a  general  unapportioned  tax  on  the  product  of  the  farm  and  the 
rents  of  real  estate,  although  imposed  merely  because  of  ownership 
and  with  no  possible  means  of  escape  from  payment,  as  belonging  to 
a  totally  different  class  from  that  which  includes  the  property  from 
whence  the  income  proceeds? 

There  can  be  but  one  answer,  unless  the  constitutional  restric- 
tion is  to  be  treated  as  utterly  illusory  and  futile,  and  the  object 
of  its  framers  defeated.  We  find  it  impossible  to  hold  that  a  fun- 
damental requisition,  deemed  so  important  as  to  be  enforced  by 
two  provisions,  one  affirmative  and  one  negative,  can  be  refined 
away  by  forced  distinctions  between  that  which  gives  value  to 
property,  and  the  property  itself. 

Nor  can  we  perceive  any  ground  why  the  same  reasoning  does 
not  apply  to  capital  in  personalty  held  for  the  purpose  of  income  or 
ordinarily  yielding  income,  and  to  the  income  therefrom.  All 
the  real  estate  of  the  country,  and  all  its  invested  personal  prop- 
erty, are  open  to  the  direct  operation  of  the  taxing  power  if  an 
apportionment  be  made  according  to  the  Constitution.  The  Con- 
stitution does  not  say  that  no  direct  tax  shall  be  laid  by  apportion- 
ment on  any  other  property  than  land;  on  the  contrary,  it  forbids 
all  unapportioned  direct  taxes;  and  we  know  of  no  warrant  for 
excepting  personal  property  from  the  exercise  of  the  power,  or  any 
reason  why  an  apportioned  direct  tax  cannot  be  laid  and  assessed, 
as  Mr.  Gallatin  said  in  his  report  when  Secretary  of  the  Treasury  in 
1812,  "upon  the  same  objects  of  taxation  on  which  the  direct  taxes 
are  levied  under  the  authority  of  the  State  are  laid  and  assessed. " 

Personal  property  of  some  kind  is  of  general  distribution;  and 


POLLOCK  V.  FAKMEKS'  LOAN  AND  TRUST  CO.     213 

so   are   incomes,   though   the   taxable   range   thereof  might  be  nar- 
rowed through  large  exemptions. 

The  stress  of  the  argument  is  thrown,  however,  on  the  assertion 
that  an  income  tax  is  not  a  property  tax  at  all;  that  it  is  not 
a  real  estate  tax,  or  a  crop  tax,  or  a  bond  tax ;  that  it  is  an  assess- 
ment upon  the  taxpayer  on  account  of  his  money-spending  power 
as  shown  by  his  revenue  for  the  year  preceding  the  assessment; 
that  rents  received,  crops  harvested,  interest  collected,  have  lost  all 
connection  with  their  origin,  and  although  once  not  taxable  have  be- 
come transmuted  in  their  new  form  into  taxable  subject-matter; 
in  other  words,  that  income  is  taxable  irrespective  of  the  source 
from  whence  it  is  derived. 

We  have  unanimously  held  in  this  case  that,  so  far  as  this  law 
operates  on  the  receipts  from  municipal  bonds,  it  cannot  be  sustained, 
because  it  is  a  tax  on  the  power  of  the  states,  and  on  their  instru- 
mentalities to  borrow  money,  and  consequently  repugnant  to  the 
Constitution.  But  if,  as  contended,  the  interest  when  received 
has  become  merely  money  in  the  recipient's  pocket,  and  taxable  as 
such  without  reference  to  the  source  from  which  it  came,  the  ques- 
tion is  immaterial  whether  it  could  have  been  originally  taxed  at 
all  or  not.  This  was  admitted  by  the  Attorney-General  with  char- 
acteristic candor;  and  it  follows  that,  if  the  revenue  derived  from 
municipal  bonds  cannot  be  taxed  because  the  source  cannot  be,  the 
same  rule  applies  to  revenue  from  any  other  source  not  subject 
to  the  tax;  and  the  lack  of  power  to  levy  any  but  an  apportioned 
tax  on  real  and  personal  property  equally  exists  as  to  the  revenue 
therefrom. 

Admitting  that  this  act  taxes  the  income  of  property  irrespective 
of  its  source,  still  we  cannot  doubt  that  such  a  tax  is  necessarily  a 
direct  tax  in  the  meaning  of  the  Constitution. 

At  the  time  the  Constitution  was  framed  and  adopted,  under 
the  systems  of  direct  taxation  of  many  of  the  States,  taxes  were 
laid  on  incomes  from  professions,  business,  or  employments,  as 
well  as  from  "offices  and  places  of  profit'';  but  if  it  were  the  fact 
that  there  had  been  no  income  tax  law,  such  as  this,  it  would  not 
be  of  controlling  importance.  A  direct  tax  cannot  be  taken  out 
of  the  constitutional  rule  because  the  particular  tax  did  not  exist 
at  the  time  the  rule  was  prescribed. 

Being    direct,    and   therefore    to    be   laid    by    apportionment,    is 


214  LIMITATIONS  OF  THE  TAXING  POWER. 

there  any  real  difficulty  in  doing  so?  Cannot  Congress,  if  the  neces- 
sity exists  of  raising  thirty,  forty,  or  any  other  number  of  million 
dollars  for  the  support  of  the  government,  in  addition  to  the  reve- 
nue from  duties,  imposts,  and  excises,  apportion  the  quota  of 
each  State  upon  the  basis  of  the  census,  and  thus  advise  it  of  the 
payment  which  must  be  made,  and  proceed  to  assess  that  amount 
on  all  real  and  personal  property  and  the  income  of  all  persons 
in  the  State,  and  to  collect  the  same  if  the  State  does  not  in  the 
meantime  assume  and  pay  its  quota  and  collect  the  amount  accord- 
ing to  its  own  system  and  its  own  way?  Cannot  Congress  do  this, 
as  respects  either  or  all  these  subjects  of  taxation,  and  deal  with 
each  in  such  manner  as  might  be  deemed  expedient,  as  indeed  was 
done  in  the  act  of  July  14,  1798,  c.  75, 1  Stat.  597  ?  Inconveniences 
might  possibly  attend  the  levy  of  an  income  tax,  notwithstanding 
the  listing  of  receipts,  when  adjusted,  furnishes  its  own  valuation; 
but  that  it  is  apportionable  is  hardly  denied,  although  it  is  asserted 
that  it  would  operate  so  unequally  as  to  be  undesirable. 

Our  conclusions  may,  therefore,  be  summed  up  as  follows: 

First.  We  adhere  to  the  opinion  already  announced  that,  taxes 
on  real  estate  being  indisputably  direct  taxes,  taxes  on  the  rent  or 
income  of  real  estate  are  equally  direct  taxes. 

Second.  We  are  of  opinion  that  taxes  on  personal  property 
or  on  income  of  personal  property,  are  likewise  direct  taxes. 

Third.  The  tax  imposed  by  sections  twenty-seven  to  thirty-seven, 
inclusive,  of  the  act  of  1894,  so  far  as  it  falls  on  the  income  of 
real  estate  and  of  personal  property,  being  a  direct  tax  within 
the  meaning  of  the  Constitution,  and,  therefore,  unconstitutional  and 
void  because  not  apportioned  according  to  representation,  all  those 
sections,  constituting  one  entire  scheme  of  taxation,  are  necessarily 
invalid. 


V.    UNIFORMITY  THROUGHOUT  THE  UNITED  STATES. 
KNOWLTON  V.  MOORE. 

Supreme  Court  of  the  United  States.    May,  1900. 
178   United  States  41. 

Mr.  Justice  WHITE  delivered  the  opinion  of  the  court. 

Demand    having   been   made   by   the   collector   for   the   payment, 


KNOWLTOX   V.  MOORE.  215 

accompanied  with  a  threat  to  distrain  in  case  of  refusal,  the  tax 

was  paid  under  written  protest In  the  receipt  given 

it  was  recited  that  the  tax  had  been  paid  under  protest  to  avoid 
the  use  of  compulsory  process.  A  petition  for  refunding  was  sub- 
sequently presented,  by  the  executors,  in  which  the  grounds  of 
protest  were  reiterated.  The  Commissioner  of  Internal  Revenue 
having  made  an  adverse  ruling,  the  present  suit  was  com- 
menced to  recover  the  amount  paid.  The  facts  as  to  the  assessment 
and  collection  of  the  taxes  were  averred,  and  the  refusal  of  the 
internal  revenue  commissioner  to  refund  was  alleged.  The  petition 
for  refunding  was  made  a  part  of  the  pleadings.  The  right  to  re- 
payment was  based  upon  the  averment  that  the  sections  of  the 
statute,  under  authority  of  which  the  amount  had  been  assessed 
and  collected,  were  unconstitutional.  The  Circuit  Court  sustained 
a  demurrer,  on  the  ground  that  no  cause  of  action  was  alleged. 
The  claim  was  rejected,  and  the  suit  was  dismissed  with  costs. 

The  questions  which  arise  on  this  writ  of  error,  to  review  the 
judgment  of  the  Circuit  Court,  are  fourfold:  First,  that  the  taxes 
should  have  been  refunded  because  they  were  direct  taxes,  and  not 
.being  apportioned  were  hence  repugnant  to  article  1,  section  8,  of  the 
Constitution  of  the  United  States;  second,  if  the  taxes  were  not 
direct,  they  were  levied  on  rights  created  solely  by  State  law,  depend- 
ing for  their  continued  existence  on  the  consent  of  the  several 
States,  a  volition  which  Congress  has  no  power  to  control,  and  as  to 
which  it  could  not,  therefore,  exercise  its  taxing  authority;  third, 
if  the  taxes  were  not  direct,  and  were  not  assessed  upon  objects  or 
rights  which  were  beyond  the  reach  of  Congress,  nevertheless  the 
taxes  were  void,  because  they  were  not  uniform  throughout  the 
United  States,  as  required  by  article  1,  section  9,  of  the  Constitution 
of  the  United  States;  fourth,  because,  although  the  taxes  be  held  to 
have  been  in  all  respects  constitutional,  nevertheless  they  were  illegal, 
since  in  their  assessment  the  rate  of  the  tax  was  determined  by 
the  aggregate  amount  of  the  personal  estate  of  the  deceased,  and 
not  by  the  sum  of  the  legacies  or  distributive  shares,  or  the  right 
to  take  the  same,  which  were  the  objects  upon  which,  by  the  law, 
the  taxes  were  placed. 

Although  it  may  be,  in  the  abstract,  an  analysis  of  these  ques- 
tions, in  logical  sequence,  would  require  a  consideration  of  the 
propositions  in  the  order  just  stated,  we  shall  not  do  so  for  the 
following  reasons:  The  inquiry  whether  the  taxes  are  direct  or 
indirect  must  involve  the  prior  determination  of  the  objects  or 
rights  upon  which  by  law  they  are  imposed  and  assessed,  since 


21G  LIMITATIONS  OF  THE  TAXING  POWER. 

it  becomes  essential  primarily  to  know  what  the  law  assesses  and 
taxes  in  order  to  completely  learn  the  nature  of  the  burden.  So, 
also,  to  solve  the  contention  as  to  want  of  uniformity,  it  is  requisite 
to  understand  not  only  the  objects  or  rights  which  are  taxed,  but 
the  method  ordained  by  the  statute  for  assessing  and  collecting. 
This  must  be  the  case,  since  uniformity,  in  whatever  aspect  it  be 
considered,  involves  knowledge  as  to  the  operation  of  the  taxing 
law,  an  understanding  of  which  cannot  be  arrived  at  without  a 
clear  conception  of  what  the  law  commands  to  be  done.  For  these 
reasons  we  shall  first,  in  a  general  way,  consider  upon  what  rights 
or  objects  death  duties,  as  they  are  termed  in  England,  are  im- 
posed. Having,  from  a  review  of  the  history  of  such  taxes,  reached 
a  conclusion  on  this  subject,  we  shall  decide  whether  Congress  has 
power  to  levy  such  taxes.  This  being  settled,  we  shall  analyze  the 
particular  act  under  review,  for  the  purpose  of  ascertaining  the 
precise  form  of  tax  for  which  it  provides  and  the  mode  of  assess- 
ment which  it  directs.  These  questions  being  disoposed  of,  we 
shall  determine  whether  the  taxes  which  the  act  imposes  are  void, 
because  not  apportioned  or  for  the  want  of  uniformity. 

It  is  conceded  on  all  sides  that  the  levy  and  collection  of  some 
form  of  death  duty  is  provided  by  the  sections  of  the  law  in  ques- 
tion. Bearing  this  in  mind,  the  exact  form  of  the  tax  and  the 
method  of  its  assessment  need  not  be  presently  defined,  since  doing 
so  appropriately  belongs  to  the  more  specific  interpretation  of 
the  statute  to  which  we  shall  hereafter  direct  our  attention.  Taxes 
of  this  general  character  are  universally  deemed  to  relate,  not  to 
property  eo  nomine,  but  to  its  passage  by  will  or  by  descent  irt 
cases  of  intestacy,  as  distinguished  from  taxes  imposed  on  property, 
real  or  personal  as  such,  because  of  its  ownership  and  possession. 
In  other  words,  the  public  contribution  which  death  duties  exact  is 
predicated  on  the  passing  of  property  as  the  result  of  death,  as  dis- 
tinct from  a  tax  on  property  disassociated  from  its  transmission  or 
receipt  by  will,  or  as  the  result  of  intestacy 

Having  ascertained  the  nature  of  death  duties,  the  first  question 
which  arises  is  this:  Can  the  Congress  of  the  United  States 
levy  a  tax  of  that  character?  The  proposition  that  it  cannot  rests 
upon  the  assumption  that,  since  the  transmission  of  property  by 
death  is  exclusively  subject  to  the  regulating  authority  of  the  sev- 
eral States,  therefore  the  levy  by  Congress  of  a  tax  on  inheritances 
or  legacies,  in  any  form,  is  beyond  the  power  of  Congress,  and 
is  an  interference  by  the  National  Government  with  a  matter  which 


KNOWLTON  V.  MOORE.  21? 

falls  alone  within  the  reach  of  state  legislation.  It  is  to  be  remarked 
that  this  proposition  denies  to  Congress  the  right  to  tax  a  subject- 
matter  which  was  conceded  to  be  within  the  scope  of  its  power  very 
early  in  the  history  of  the  government It  is,  more- 
over, worthy  of  remark  that  similar  taxes  have  at  other  period- 
and  for  a  considerable  time  been  enforced;  and,  although  their 
constitutionality  was  assailed  on  other  grounds  held  unsound  by 
this  Court,  the  question  of  want  of  authority  of  Congress  to  levy 
a  tax  on  inheritances  and  legacies  was  never  urged  against  the 
acts  in  question.  Whilst  these  considerations  are  of  great  weight, 
let  us  for  the  moment  put  them  aside  to  consider  the  reasoning 
upon  which  the  proposition  denying  the  power  of  Congress  to  im- 
pose death  duties  must  rest. 

Confusion  of  thought  may  arise  unless  it  be  always  remembered 
that,  fundamentally  considered,  it  is  the  power  to  transmit  or  th>; 
transmission  or  receipt  of  property  by  death  which  is  the  subject 
levied  upon  by  all  death  duties.  The  qualification  of  such  taxes  as 
privilege  taxes,  or  describing  them  as  levied  on  a  privilege,  may 
also  produce  misconception,  unless  the  import  of  these  words  be 
accurately  understood.  They  have  been  used  where  the  power  of  a 
state  government  to  levy  a  particular  form  of  inheritance  or 
legacy  tax  has  in  some  instances  been  assailed  because  of  a  constitu- 
tional limitation  on  the  taxing  power.  Under  these  circumstances, 
the  question  has  arisen  whether,  because  of  the  power  of  the  State 
to  regulate  the  transmission  of  property  by  death,  there  did  not 
therefore  exist  a  less  trammeled  right  to  tax  inheritances  and 
legacies  than  obtained  as  to  other  subject-matters  of  taxation,  and, 
upon  the  affirmative  view  being  adopted,  a  tax  upon  inheritances 
or  legacies  for  this  reason  has  been  spoken  of  as  privilege  taxation, 
or  a  tax  on  privileges.  The  conception,  then,  as  to  the  privilege, 
whilst  conceding  fully  that  the  occasion  of  the  transmission  or  re- 
ceipt of  property  by  death  is  a  usual  subject  of  the  taxing  power, 
yet  maintains  that  a  wider  discretion  or  privilege  is  vested  in  the 
States,  because  of  the  right  to  regulate.  Courts  which  maintain  this 
view  have  therefore  treated  death  duties  as  disenthralled  from  lim- 
itations which  would  otherwise  apply,  if  the  privilege  of  regulation 
did  not  exist. 

All  courts  and  all  governments,  however, con- 
ceive that  the  transmission  of  property  occasioned  by  death,  although 
differing  from  the  tax  on  property  as  such,  is,  nevertheless,  a  usual 
subject  of  taxation.  Of  course,  in  considering  the  power  of  Con- 


218  LIMITATIONS  OF  THE  TAXING  POWER, 

gress  to  impose  death  duties,  we  eliminate  all  thought  of  a  greater 
privilege  to  do  so  than  exists  as  to  any  other  form  of  taxation, 
as  the  right  to  regulate  successions  is  vested  in  the  States  and  not 
in  Congress. 

It  is  not  denied  that,  subject  to  a  compliance  with  the  limitations 
in  the  Constitution,  the  taxing  power  of  Congress  extends  to  all  usual 
subjects  of  taxation.  Indeed,  as  said  in  the  License  Tax  Cases,  5 
Wall.  462,  471,  after  referring  to  the  limitations  expressed  in  the 
Constitution,  "Thus  limited,  and  thus  only,  it  (the  taxing  power 
of  Congress)  reaches  every  subject,  and  may  be  exercised  at  dis- 
cretion." The  limitation  which  would  exclude  from  Congress  the 
right  to  tax  inheritances  and  legacies  is  made  to  depend  upon  the 
contention  that  as  the  power  to  regulate  successions  is  lodged  solely 
in  the  several  States,  therefore  Congress  is  without  authority  to 
tax  the  transmission  or  receipt  of  property  by  death.  ... 

But  the  fallacy  which  underlies  the  proposition  contended  for  is 
the  assumption  that  the  tax  on  the  transmission  or  receipt  of  prop- 
erty occasioned  by  death  is  imposed  on  the  exclusive  power  of  the 
State  to  regulate  the  devolution  of  property  upon  death.  The  thing 
forming  the  universal  subject  of  taxation  upon  which  inheritance 
and  legacy  taxes  rest  is  the  transmission  or  receipt,  and  not  the  right 
existing  to  regulate.  In  legal  effect,  then,  the  proposition  upon 
which  the  argument  rests  is  that  wherever  a  right  is  subject  to  ex- 
clusive regulation,  by  either  the  government  of  the  United  States  on 
the  one  hand  or  the  several  States  on  the  other,  the  exercise  of  such 
rights  as  regulated  can  alone  be  taxed  by  the  government  having  the 
mission  to  regulate.  But  when  it  is  accurately  stated,  the  proposi- 
tion denies  the  authority  of  the  States  to  tax  objects  which  are  con- 
fessedly within  the  reach  of  their  taxing  power,  and  also  excludes  the 
National  Government  from  almost  every  subject  of  direct  and  many 
acknowledged  objects  of  indirect  taxation.  Thus  imports  are  ex- 
clusively within  the  taxing  power  of  Congress.  Can  it  be  said  that 
the  property  when  imported  and  commingled  with  the  goods  of  the 
State  cannot  be  taxed,  because  it  had  been  at  some  prior  time  the 
subject  of  exclusive  regulation  by  Congress.  Again,  interstate  com- 
merce is  often  within  the  exclusive  regulating  power  of  Congress. 
Can  it  be  asserted  that  the  property  of  all  persons  or  corporations 
engaged  in  such  commerce  is  not  the  subject  of  taxation  by  the  sev- 
eral States,  because  Congress  may  regulate  interstate  commerce? 
Conveyances,  mortgages,  leases,  pledges,  and,  indeed,  all  property 
and  the  contracts  which  arise  from  its  ownership,  are  subject  more 
or  less  to  state  regulation,  exclusive  in  its  nature.  If  the  proposition 


KNOWLTON"  V.  MOORE.  21'J 

here  contended  for  be  sound,  such  property  or  dealings  in  relation 
thereto  cannot  be  taxed  by  Congress,  even  in  the  form  of  a  stamp 
duty.  It  cannot  be  doubted  that  the  argument  when  reduced  to  its 
essence  demonstrates  its  own  unsoundness,  since  it  leads  to  the 
necessary  conclusion  that  both  the  National  and  State  governments 
are  divested  of  those  powers  of  taxation  which  from  the  foundation 
of  the  government  admittedly  have  belonged  to  them.  Certainly,  a 
tax  placed  upon  an  inheritance  or  legacy  diminishes,  to  the  extent  of 
the  tax,  the  value  of  the  right  to  inherit  or  receive,  but  this  is  .1 
burden  cast  upon  the  recipient  and  not  upon  the  power  of  the  State 

to  regulate 

We  are  then  brought  to  a  consideration  of  the  particular  form  of 
death  duty,  which  is  manifested  by  the  statute  under  consideration. 

It  is  at  the  outset  obvious  that  the  exact  meaning  of  the  statute 
is  not  free  from  perplexity,  as  there  are  clauses  in  it,  when  looked 
at  apart  from  their  context,  which  may  give  rise  to  conflicting 
views.  It  is  plain,  however,  that  the  statute  must  mean  one  of  three 
things : 

1.  The  tax  which  it  imposes  is  on  the  passing  of  the  whole  amount 
of  the  personal  estate,  with  a  progressive  rate  depending  upon  the 
sum  of  the  whole  personal  estate;    or, 

2.  The  tax  which  it  levies  is  placed  on  the  passing  of  legacies  or 
distributive   shares  of  personal  property  at  a  progressive  rate,  the 
amount  of  such  rate  being  determined,  not  by  the  separate  sum  of 
each  legacy  or  distributive  share,  but  by  the  volume  of  the  whole 
personal  estate.     This  is  the  mode  in  which  the  tax  was  computed 
by  the  assessor,  and  which  was  sustained  by  the  court  below;   or, 

3.  The  tax  is  on  the  passing  of  legacies  or  distributive  shares  of 
personalty,  with  a  progressive  rate  on  each,  separately  determined 
by  the  sum  of  each  of  such  legacies  or  distributive  shares. 

The  tax  being  then  on  the  legacies  and  distributive  shares,  the 
rate  primarily  being  determined  by  the  relation  of  the  legatees  or 
distributees  to  the  estate,  does  the  law  command  that  the  progressive 
rate  of  tax  which  it  imposes  on  the  legacies  or  distributive  shares 
shall  be  measured,  not  separately  by  the  amount  of  each  particular 
legacy  or  distributive  share,  but  by  the  sum  of  the  whole  personal 
estate?  This,  as  we  have  said,  is  the  interpretation  of  the  act  which 
was  adopted  by  the  assessor  in  levying  the  taxes  under  review,  and 
which  was  sustained  by  the  court  below. 


220  LIMITATIONS  OF  THE  TAXING  POWER. 

Granting,  however,  that  there  is  doubt  as  to  the  construction,  in 
view  of  the  consequences  which  result  from  adopting  the  theory  that 
the  act  taxes  each  separate  legacy  by  a  rate  determined,  not  by  the 
amount  of  the  legacy,  but  by  the  amount  of  the  whole  personal 
estate  left  by  the  deceased,  we  should  be  compelled  to  solve  the  doubt 
against  the  interpretation  relied  on.  The  principle  on  which  such 
construction  rests  was  thus  defended  in  argument.  The  tax  is  on 
each  separate  legacy  or  distributive  share,  but  the  rate  is  measured 
by  the  whole  estate.  In  other  words,  the  construction  proceeds  upon 
the  assumption  that  Congress  intended  to  tax  the  separate  legacies, 
not  by  their  own  value,  but  by  that  of  a  wholly  distinct  and  separate 
thing.  But  this  is  equivalent  to  saying  that  the  principle  underly- 
ing the  asserted  interpretation  is  that  the  house  of  A,  which  is  only 
worth  one  thousand  dollars,  may  be  taxed,  but  that  the  rate  of  the 
tax  is  to  be  determined  by  attributing  to  A's  house  the  value  of  B'? 
house,  which  may  be  worth  a  hundred-fold  the  amount.  The  gross 
inequalities  which  must  inevitably  result  from  the  admission  of  this 
theory  are  readily  illustrated.  Thus,  a  person  dying  and  leaving  an 
estate  of  $10,500,  bequeaths  to  a  hospital  ten  thousand  dollars.  The 
rate  of  tax  would  be  five  per  cent,  and  the  amount  of  tax  five  hun- 
dred dollars.  Another  person  dies  at  the  same  time,  leaves  an 
estate  of  one  million  dollars,  and  bequeaths  ten  thousand  dollars  to 
the  same  institution.  The  rate  of  tax  would  be  \2l/2  per  cent,  and 
the  amount-  of  the  tax  $1250.  It  would  thus  come  to  pass  that  the 
same  person,  occupying  the  same  relation,  and  taking  in  the  same 
character,  two  equal  sums  from  two  different  persons,  would  pay  in 
the  one  case  more  than  twice  the  tax  that  he  would  in  the  other. 
In  the  arguments  of  counsel  tables  are  found  which  show  how  in- 
evitable and  profound  are  the  inequalities  which  the  construction 
must  produce.  Clear  as  is  the  demonstration  which  they  make,  they 
only  serve  to  multiply  instances  afforded  by  the  one  example  which 
we  have  just  given. 

We  are,  therefore,  bound  to  give  heed  to  the  rule,  that  where  a 
particular  construction  of  a  statute  will  occasion  great  inconveni- 
ence or  produce  inequality  and  injustice,  that  view  is  to  be  avoided 
if  another  and  more  reasonable  interpretation  is  present  in  the  stat- 
ute. Bate  Refrigerating  Co.  v.  Sulzeberger,  157  U.  S.  1,  37;  Wil- 
son v.  Rousseau,  4  How.  646,  680 ;  Bloomer  v.  McQuewan,  14  How. 
539,  553;  Blake  v.  National  Banks,  23  Wall.  307,  320;  United 
States  v.  Kirby,  7  Wall.  482,  486 

It  may  be  doubted  by  some,  aside  from  express  constitutional  re- 
strictions, whether  the  taxation  by  Congress  of  the  property  of  one 


KNOWLTOX  V.  MOORE.  221 

person,  accompanied  with  an  arbitrary  provision  that  the  rate  of  tax 
shall  be  fixed  with  reference  to  the  sum  of  the  property  of  another, 
thus  bringing  about  the  profound  inequality  which  we  have  noticed, 
would  not  transcend  the  limitations  arising  from  those  fundamental 
conceptions  of  free  government  which  underlie  all  constitutional 
systems.  On  this  question,  however,  in  any  of  its  aspects,  we  do  not 
even  intimate  an  opinion,  as  no  occasion  for  doing  so  exists,  since,  as 
we  understand  the  law,  we  are  clearly  of  opinion  that  it  does  not 
sustain  the  construction  which  was  placed  on  it  by  the  court  below. 

The  precise  meaning  of  the  law  being  thus  determined,  the  ques- 
tion whether  the  tax  which  it  imposes  is  direct,  and  hence  subject  to 
the  requirement  of  apportionment,  arises  for  consideration.  That 
death  duties,  generally,  have  been  from  the  beginning  in  all  countries 
considered  as  different  from  taxes  levied  on  property,  real  or  per- 
sonal, directly  on  account  of  the  ownership  and  possession  thereof, 
is  demonstrated  by  the  review  which  we  have  previously  made.  It- 
has  also  been  established  by  what  we  have  heretofore  said,  that  such 
taxes,  almost  from  the  beginning  of  our  national  life,  have  been 
treated  as  duties,  and  not  as  direct  taxes.  Of  course,  they  concern 
the  passing  of  property  by  death,  for  if  there  was  no  property  to 
transmit,  there  would  be  nothing  upon  which  the  tax  levied  on  the 
occasion  of  death  could  be  computed.  This  legislative  and  adminis- 
trative view  of  such  taxes  has  been  directly  upheld  by  this  court.  In 
Scholey  v.  Rew,  23  Wall.  331,  349, the  question  pre- 
sented was  the  constitutionality  of  the  provisions  of  the  act  of  1864, 
imposing  a  succession  duty  as  to  real  estate.  The  assertion  was  that 
the  duty  was  repugnant  to  the  Constitution,  because  it  was  a  direct 
tax  and  had  not  been  apportioned.  The  tax  was  decided  to  be  con- 
stitutional. The  court  said  (p.  346)  : 

"But  it  is  clear  that  the  tax  or  duty  levied  by  the  act  under  con- 
sideration is  not  a  direct  tax  within  the  meaning  of  either  of  these 
provisions.  Instead  of  that  it  is  plainly  an  excise  tax  or  duty,  au- 
thorized by  section  eight  of  article  one,  which  vests  the  power  in 
Congress  to  lay  and  collect  taxes,  duties,  imposts,  and  excises  to  pay 
the  debts  and  provide  for  the  common  defence  and  general  welfare." 

Concluding,  then,  that  the  tax  under  consideration  is  not  direct 
within  the  meaning  of  the  Constitution,  but,  on  the  contrary,  is  a 
duty  or  excise,  we  are  brought  to  consider  the  question  of  uniformity. 

The  contention  is  that  the  statute  exempts  legacies  and  distrib- 
utive shares  in  personal  property  below  ten  thousand  dollars,  because 


222  LIMITATIONS  OF  THE  TAXING  POWER. 

it  classifies  the  rate  of  tax  according  to  the  relationship  or  absence 
of  relationship  of  the  taker  to  the  deceased,  and  provides  for  a  rate 
progressing  by  the  amount  of  the  legacy  or  share,  therefore  the  tax 
is  repugnant  to  that  portion  of  the  first  clause  of  section  8  article  1 
of  the  Constitution,  which  provides  "the  duties,  imposts  and  excises 
shall  be  uniform  throughout  the  United  States." 

The  argument  to  the  contrary,  whilst  conceding  that  the  tax  de- 
vised by  the  statute  dees  not  fulfill  the  requirement  of  equality 
and  uniformity,  as  those  words  are  construed  when  found  in  state 
constitutions,  asserts  that  it  does  not  thereby  follow  that  the  taxes 
in  question  are  repugnant  to  the  Constitution  of  the  United  States, 
since  the  provisions  in  the  Constitution,  that  "duties,  imposts  and  ex- 
cises shall  be  uniform  throughout  the  United  States,"  it  is  insisted 
has  a  different  meaning  from  the  expression  equal  and  uniform, 
found  in  state  constitutions.  In  order  to  decide  these  respective  con- 
tentions it  becomes  at  the  outset  necessary  to  accurately  define  the 
theories  upon  which  they  rest. 

On  the  one  side,  the  proposition  is  that  the  command  that  duties, 
imposts  and  excises  shall  be  uniform  throughout  the  United  States 
relates  to  the  inherent  and  intrinsic  character  of  the  tax;  that  it 
contemplates  the  operation  of  the  tax  upon  the  property  of  the  indi- 
vidual taxpayer,  and  exacts  that  when  an  impost,  duty  or  excise  is 
levied,  it  shall  operate  precisely  in  the  same  manner  upon  all  indi- 
viduals; that  is  to  say,  the  proposition  is  that  "uniform  throughout 
the  United  States"  commands  that  excises,  duties  and  imposts,  when 
levied,  shall  be  equal  and  uniform  in  their  operation  upon  persons 
and  property  in  the  sense  of  the  meaning  of  the  words  equal  and 
uniform,  as  now  found  in  the  constitution  of  most  of  the  States  of 
the  Union.  The  contrary  construction  is  this:  That  the  words 
"uniform  throughout  the  United  States"  do  not  relate  to  the  inherent 
character  of  the  tax  as  respects  its  operation  on  individuals,  but  sim- 
ply requires  that  whatever  plan  or  method  Congress  adopts  for  laying 
the  tax  in  question,  the  same  plan  and  the  same  method  must  be 
made  operative  throughout  the  United  States — that  is  to  say,  that 
wherever  a  subject  is  taxed  anywhere,  the  same  must  be  taxed  every- 
where throughout  the  United  States,  and  at  the  same  rate.  The 
two  contentions  then  may  be  summarized  by  saying  that  the  one 
asserts  that  the  Constitution  prohibits  the  levy  of  any  duty,  impost 
or  excise  which  is  not  intrinsically  equal  and  uniform  in  its  opera- 
tion upon  individuals,  and  the  other  that  the  power  of  Congress  in 
levying  the  taxes  in  question  is  by  the  terms  of  the  Constitution  re- 


KNOWLTON  V.  MOORE.  223 

strained  only  by  the  requirement  that  such  taxes  be  geographically 
uniform. 

Considering  the  text,  it  is  apparent  that  if  the  word  "uniform" 
means  "equal  and  uniform"  in  the  sense  now  asserted  by  the  op- 
ponents of  the  tax,  the  words  "throughout  the  United  States"  are 
deprived  of  all  real  significance,  and  sustaining  the  contention  must 
hence  lead  to  a  disregard  of  the  elementary  canon  of  construction 
which  requires  that  effect  be  given  to  each  word  of  the  Constitution. 

Taking  a  wider  view,  it  is  to  be  remembered  that  the  power  to 
tax  contained  in  section  8  of  article  1  is  to  lay  and  collect  "taxes, 
duties,  imposts  and  excises.  .  •  .  .  .  .  But  all  duties,  imposts 
and  excises  shall  be  uniform  throughout  the  United  States."  Thus, 
the  qualification  of  uniformity  is  imposed,  not  upon  all  taxes  which 
the  Constitution  authorizes,  but  only  on  duties,  imposts  and  excises. 
The  conclusion  that  inherent  equality  and  uniformity  is  contem- 
plated involves,  therefore,  the  proposition  that  the  rule  of  intrinsic 
uniformity  is  applied  by  the  Constitution  to  taxation  by  means  of 
duties,  imposts  and  excises,  and  it  is  not  applicable  to  any  other 
form  of  taxes.  It  cannot  be  doubted  that  in  levying  direct  taxes, 
after  apportioning  the  amount  among  the  several  States,  as  provided 
in  clause  4  of  section  9  of  article  1  of  the  Constitution,  Congress  has 
the  power  to  choose  the  objects  of  direct  taxation,  and  to  levy  the 
quota  as  apportioned  directly  upon  the  objects  so  selected.  Even 
then,  if  the  view  of  inherent  uniformity  be  the  true  one,  none  of  the 
taxes  so  levied  would  be  subjected  to  such  rule,  as  the  requirement 
only  relates  to  duties,  imposts  and  excises. 

But  the  classes  of  taxes  termed  duties,  imposts  and  excises,  to 
which  the  rule  of  uniformity  applies,  are  those  to  which  the  princi- 
ple of  equality  and  uniformity  in  the  sense  claimed,  is  in  the  nature 
of  things  the  least  applicable  and  least  susceptible  of  being  enforced. 
Excises  usually  look  to  a  particular  subject,  and  levy  burdens  with 
reference  to  the  act  of  manufacturing  them,  selling  them,  etc.  They 
are  or  may  be  as  varied  in  form  as  are  the  acts  or  dealings  with 
which  the  taxes  are  concerned.  Impost  duties  take  every  conceivable 
form,  as  may  by  the  legislative  authority  be  deemed  best  for  the  gen- 
eral welfare.  They  have  been  at  all  times  often  specific.  They  have 
sometimes  been  discriminatory,  particularly  when  deemed  necessary 
by  reason  of  the  tariff  legislation  of  other  countries.  The  claim  of 
intrinsic  uniformity,  therefore,  imputes  to  the  framers  a  restriction 
as  to  certain  forms  of  taxes,  where  the  restraint  was  least  appropri- 
ate and  the  omission  where  it  was  most  needed.  This  discord  which 


224  LIMITATIONS  OF  THE  TAXING  POWER. 

the  construction,  if  well  founded,  would  create,  suggests  at  once  the 
unsoundness  of  the  proposition,  and  gives  rise  to  the  inference  that 
the  contrary  view  by  which  the  unity  of  the  provisions  of  the  Consti- 
tution is  maintained,  must  be  the  correct  one.  In  fact,  it  is  ap- 
parent that  if  imposts,  duties  and  excises  are  controlled  by  the  rule 
of  intrinsic  uniformity,  the  methods  usually  employed  at  the  time 
of  the  adoption  of  the  Constitution  in  all  countries  in  the  levy  of 
such  taxes  would  have  to  be  abandoned  in  this  country,  and,  there- 
fore, whilst  nominally  having  the  authority  to  impose  taxes  of  this 
character,  the  power  to  do  so  would  virtually  be  denied  to  Congress. 
Now,  that  the  requirement  that  direct  taxes  should  be  apportioned 
among  the  several  States,  contemplated  the  protection  of  the  States, 
to  prevent  their  being  called  upon  to  contribute  more  than  was 
deemed  their  due  share  of  the  burden,  is  clear.  Giving  to  the  term 
uniformity  as  applied  to  duties,  imposts  and  excises  a  geographical 
significance,  likewise  causes  that  provision  to  look  to  the  forbidding 
of  discrimination  as  between  the  States,  by  the  levying  of  duties,  im- 
posts or  excises  upon  a  particular  subject  in  one  State  and  a  differ- 
ent duty,  impost  or  excise  on  the  same  subject  in  another;  and, 
therefoie,  as  far  as  may  be,  is  a  restriction  in  the  same  direction  and 
in  harmony  with  the  requirement  of  apportionment  of  direct  taxes. 
And  the  conclusion  that  the  possible  discrimination  against  one  or 
more  States  was  the  only  thing  intended  to  be  provided  for  by  the 
rule  which  uniformity  imposed  upon  the  power  to  levy  duties,  im- 
posts and  excises,  is  greatly  strengthened  by  considering  the  state  of 
the  law  in  the  mother  country  and  in  the  colonies,  and  the  practice 
of  taxation  which  obtained  at  or  about  the  time  of  the  adoption  of 
the  Constitution. 

In  taxing  laws  of  the  original  States  prior  to  the  Convention  of 
1787,  exemptions  were  allowed  from  a  consideration  of  what  was 
deemed  best  for  the  general  welfare,  and  taxes  were  frequently  laid 
from  a  consideration  of  the  presumed  ability  of  the  owner  to  pay 
the  tax.  Discriminations  and  exemptions  were  also  contained  in 
various  State  taxing  laws,  which  illustrate  the  discretion  vested  in 
the  legislative  bodies  of  the  States  in  the  latter  part  of  the  eighteenth 
century 

It  cannot  be,  therefore,  supposed  that  the  framers  of  the  Constitu- 
tion, in  using  the  words  "uniform  throughout  the  United  States," 
contemplated  to  confer  the  power  to  levy  duties,  imposts  and  ex- 
cises, and  yet  to  accompany  this  grant  of  authority  with  a  restric- 
tion which  had  never  found  expression  as  to  such  taxes  at  that  time 


KNOWLTON  V.  MOORE.  225 

anywhere,  and  which  was  contrary  to  the  practice  which  had  uni- 
formly obtained  both  in  the  mother  country  and  in  the  colonies, 
and  in  the  States  prior  to  the  adoption  of  the  Constitution.  But, 
one  of  the  most  satisfactory  answers  to  the  argument  that  the  uni- 
formity required  by  the  Constitution  is  the  same  as  the  equal  and 
uniform  clause  which  has  since  been  embodied  in  so  many  of  the 
state  constitutions,  results  from  a  review  of  the  practice  under  the 
Constitution  from  the  beginning.  From  the  very  first  Congress 
down  to  the  present  date,  in  laying  duties,  imposts  and  excises,  the 
rule  of  inherent  uniformity,  or,  in  other ,  words,  intrinsically  equal 
and  uniform  taxes,  has  been  disregarded;  and  the  principle  of  geo- 
graphical uniformity  consistently  enforced.  Take,  for  a  general  ex- 
ample, specific  import  duties,  by  which  particular  specific  rates  are 
imposed  on  enumerated  articles,  without  reference  to  their  value.  It 
is  manifest  that  all  such  duties  are  void,  if  intrinsic  equality  and 
uniformity  be  the  rule,  and  yet  in  all  the  great  controversies  which 
have  arisen  over  the  policy  of  impost  duties  generally,  and  partic- 
ularly as  to  the  economic  wisdom  of  specific  duties,  never  has  it  been 
contended  that  the  power  to  impose  them  did  not  exist  because  of 
the  uniformity  clause  of  the  Constitution.  So,  also,  mention  may  be 
made  of  the  common  form  of  the  excises  on  distilled  spirits  with  the 
tax  per  gallon  without  reference  to  the  value  thereof. 

Indeed,  tariff  duties  have  not  only  varied  with  different  articles, 
b\it  have  varied  with  the  different  valuations  of  the  same  article.  .  . 

Nor  can  it  be  said  that  these  illustrations  relate  to  legislation  en- 
acted long  after  the  adoption  of  the  Constitution,  when  by  lapse  of 
time  an  erroneous  conception  as  to  the  meaning  of  the  Constitution 
had  arisen,  for  the  examples  to  which  we  have  just  referred  are  but 
types  of  many  forms  of  taxation  by  way  of  duties,  imposts  and  ex- 
cises which  were  enacted  without  question  from  the  very  beginning, 
and  have  continued  in  an  unbroken  line  to  the  present  time,  sanc- 
tioned by  the  founders  of  our  institutions  and  approved  in  practical 
execution  by  all  the  illustrious  men  who  have  directed  the  public 
destinies  of  the  nation.  Excise  taxes  were  largely  used  during  the 
administration  of  President  Washington,  and  again  during  and  after 
the  war  of  1812.  It  may  properly  be  said  of  these  excises  that  none 
of  them  were  uniform  according  to  the  principles  now  contended  for, 
yet  no  constitutional  question  in  this  regard  was  ever  raised  about 
them 

Thus,  it  came  to  pass  that  although  the  provisions  as  to  preference 
15 


22G  LIMITATIONS  OF  THE  TAXING  POWER. 

between  ports  and  that  regarding  uniformity  of  duties,  imposts  and 
excises  were  one  in  purpose,  one  in  their  adoption,  they  became  sep- 
arated only  in  arranging  the  Constitution  for  the  purpose  of  style. 
The  first  now  stands  in  the  Constitution  as  a  part  of  the  sixth  clause 
of  section  7  of  article  1,  and  the  other  is  a  part  of  the  first  clause  of 
section  8  of  article  1.  By  the  result  then  of  an  analysis  of  the  his- 
tory of  the  adoption  of  the  Constitution  it  becomes  plain  that  the 
words  "uniform  throughout  the  United  States"  do  not  signify  an 
intrinsic  but  simply  a  geographical  uniformity.  And  it  also  results 
that  the  assertion  to  which  we  at  the  outset  referred,  that  the  de- 
cision in  the  Head  Money  cases,  holding  that  the  word  uniform  must 
be  interpreted  in  a  geographical  sense,  was  not  authoritative,  because 
the  case  in  reality  solely  involved  the  clause  of  the  Constitution  for- 
bidding preferences  between  ports,  is  shown  to  be  unsound,  since  the 
preference  clause  of  the  Constitution  and  the  uniformity  clause  were, 
in  effect,  in  framing  the  Constitution,  treated,  as  respected  their 
operation,  as  one  and  the  same  thing,  and  embodied  the  same  con- 
ception. 

Having  disposed  of  the  question  of  uniformity,  we  are  next 
brought  to  consider  certain  contentions  which  relate  to  that  subject. 
It  is  argued  that  even  although  it  be  conceded  that  the  uniformity 
required  by  the  Constitution  is  only  geographical,  the  particular  law 
in  question  does  not  fulfill  the  requirements  of  even  geographical 
uniformity,  since  it  does  not  apply  to  the  District  of  Columbia.  We 
think  this  contention  is  without  merit. 

It  is  yet  further  asserted  that  the  tax  does  not  fulfill  the  require- 
ments of  geographical  uniformity,  for  the  following  reasons :  As 
the  primary  rate  of  taxation  depends  upon  the  degree  of  relation- 
ship or  want  of  relationship  to  a  deceased  person,  it  is  argued  that 
it  cannot  operate  with  geographical  uniformity,  inasmuch  as  testa- 
mentary and  intestacy  laws  may  differ  in  every  State.  It  is  certain 
that  the  same  degree  of  relationship  or  want  of  relationship  to  the 
deceased,  wherever  existing,  is  levied  on  at  the  same  rate  throughout 
the  United  States.  The  tax  is  hence  uniform  throughout  the  United 
States,  despite  the  fact  that  different  conditions  among  the  States 
may  obtain  as  to  the  objects  upon  which  the  tax  is  levied.  The 
proposition  in  substance  assumes  that  the  objects  taxed  by  duties,  im- 
posts and  excises  must  be  found  in  uniform  quantities  and  conditions 
in  the  respective  States,  otherwise  the  tax  levied  on  them  will  not  be 
uniform  throughout  the  United  States.  But  what  the  Constitution 


KXOWLTOX  V.  MOORE.  22 1 

commands  is  the  imposition  of  a  tax  by  the  rule  of  geographical  uni- 
formity, not  that  in  order  to  levy  such  a  tax  objects  must  be  selected 
which  exist  uniformly  in  the  several  States.  Indeed,  the  contention 
was  substantially  disposed  of  in  the  License  Tax  Cases,  5  Wall.  472. 

Lastly,  it  is  urged  that  the  progressive  rate  feature  of  the  statute 
is  so  repugnant  to  fundamental  principles  of  equality  and  justice 
that  the  law  should  be  held  to  be  void,  even  although  it  transgresses 
no  express  limitation  in  the  Constitution.  Without  intimating  any 
opinion  as  to  the  existence  of  a  right  in  the  courts  to  exercise  the 
power  which  is  thus  invoked,  it  is  apparent  that  the  argument  as  to 
the  enormity  of  the  tax  is  without  merit.  It  was  disposed  of  in 
Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  293. 

The  review  which  we  have  made  exhibits  the  fact  that  taxes  im- 
posed with  reference  to  the  ability  of  the  person  upon  whom  the 
burden  is  placed  to  bear  the  same  have  been  levied  from  the  founda- 
tion of  the  government.  So,  also,  some  authoritative  thinkers,  and  a 
number  of  economic  writers,  contend  that  a  progressive  tax  is  more 
just  and  equal  than  a  proportional  one.  In  the  absence  of  constitu- 
tional limitation,  the  question  whether  it  is  or  is  not  is  legislative 
and  not  judicial.  The  grave  consequences  which  it  is  asserted  must 
arise  in  the  future  if  the  right  to  levy  a  progressive  tax  be  recognized 
involves  in  its  ultimate  aspect  the  mere  assertion  that  free  and  rep- 
resentative government  is  a  failure,  and  that  the  grossest  abuses  of 
power  are  foreshadowed  unless  the  courts  usurp  a  purely  legislative 
function.  If  a  case  should  ever  arise,  where  an  arbitrary  and  confis- 
catory  exaction  is  imposed  bearing  the  guise  of  a  progressive  or  any 
other  form  of  tax,  it  will  be  time  enough  to  consider  whether  the 
judicial  power  can  afford  a  remedy  by  applying  inherent  and  funda- 
mental principles  for  the  protection  of  the  individual,  even  though 
there  be  no  express  authority  in  the  Constitution  to  do  so.  That  the 
law  which  we  have  construed  affords  no  ground  for  the  contention 
that  the  tax  imposed  is  arbitrary  and  confiscatory,  is  obvious. 

It  follows  from  the  foregoing  opinion  that  the  court  below  erred 
in  denying  all  relief,  and  that  it  should  have  held  the  plaintiff  en- 
titled to  recover  so  much  of  the  tax  as  resulted  from  taxing  legacies 
not  exceeding  ten  thousand  dollars,  and  from  increasing  the  tax  rate 
with  reference  to  the  whole  amount  of  the  personal  estate  of  the 
deceased  from  which  the  legacies  or  distributive  shares  were  derived. 
For  these  reasons 

The  judgment  below  must   be   reversed  and  the  case  be  remanded 


228  LIMITATIONS  OF  THE  TAXING  POWER. 

with  instructions  that  further  proceedings  be  had  according  to  law 
and  in  conformity  with  this  opinion,  and  it  is  so  ordered. 

Mr.  Justice  BREWER  dissented  from  so  much  of  the  opinion  as 
holds  that  a  progressive  rate  of  tax  can  be  validly  imposed.  In  other 
respects  he  concurred. 

Mr.  Justice  PECKHAM  took  no  part  in  the  decision. 

Mr.  Justice  HARLAN,  with  whom  concurred  Mr.  Justice  McKenna, 
dissenting. 

While  I  concur  in  the  construction  placed  by  the  court  upon  the 
clause  of  the  Constitution  declaring  that  all  duties,  imposts  and  ex- 
cises shall  be  "uniform  throughout  the  United  States,"  I  dissent 
from  that  part  of  the  opinion  construing  the  twenty-ninth  and  thir- 
tieth sections  of  the  Revenue  Act.  In  my  judgment,  the  question 
whether  the  tax  presented  by  Congress  shall  or  shall  not  be  imposed 
is  to  be  determined  with  reference  to  the  whole  amount  of  the  per- 
sonal property  out  of  which  legacies  and  distributive  shares  arise. 
If  the  value  of  the  whole  personal  property  held  in  charge  or  trust 
by  an  administrator,  executor  or  trustee  exceeds  ten  thousand  dol- 
lars, then  every  part  of  it  constituting  a  legacy  or  distributive 
share,  except  the  share  of  a  husband  or  wife,  is  taxed  at  the  pro- 
gressive rate  stated  in  the  act  of  Congress.  I  do  not  think  the  act 
can  be  otherwise  interpreted  without  defeating  the  intent  of  Con- 
gress. 

Construed  as  I  have  indicated,  the  act  is  not  liable  to  any  consti- 
tutional objection. 


DOOLEY  V.  UNITED  STATES. 

Supreme  Court  of  the  United  States.     October,  1901. 
183  United  States  151. 

This  was  an  action  begun  in  the  Circuit  Court  as  a  Court  of 
Claims  by  the  firm  of  Dooley,  Smith  &  Co.,  to  recover  duties  exacted 
of  them  and  paid  under  protest  to  the  collector  of  the  port  of  San 
Juan,  Porto  Rico,  upon  merchandise  imported  into  that  port  from 
the  port  of  New  York  after  May  1,  1900,  and  since  the  Foraker  act. 
The  act  requires  all  merchandise  "coming  into  Porto  Rico  from  the 
United  States"  to  be  "entered  at  the  several  ports  of  entry  upon  pay- 
ment of  fifteen  per  centum  of  the  duties  which  are  required  to  be 


DOOLEY  V.  UNITED  STATES.  229 

levied,  collected  and  paid  upon  like  articles  of  merchandise  imported 
from  foreign  countries.'' 

A  demurrer  was  interposed  by  the  District  Attorney  upon  the 
ground  that  the  court  had  no  jurisdiction  of  the  subject  of  the 
action,  and  also  that  the  complaint  did  not  state  facts  sufficient  to 
constitute  a  cause  of  action.  The  demurrer  to  the  complaint  for  in- 
sufficiency was  sustained,  and  the  petition  dismissed. 

Mr.  Justice  BROWN,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

This  case  raises  the  question  of  the  constitutionality  of  the  For- 
aker  act,  so  far  as  it  fixes  the  duties  to  be  paid  upon  merchandise 
imported  into  Porto  Rico  from  the  port  of  New  York. 

By  section  four,  "the  duties  and  taxes  collected  in 

Porto  Rico  in  pursuance  of  this  act,  less  the  cost  of  collecting  the 
same,  and  the  gross  amount  of  all  collections  and  taxes  in  the  United 
States  upon  articles  of  merchandise  coming  from  Porto  Rico,  shall 
not  be  covered  into  the  general  fund  of  the  Treasury,  but  shall  be 
held  as  a  separate  fund,  and  shall  be  placed  at  the  disposal  of  the 
President  to  be  used  for  the  government  and  benefit  of  Porto  Rico, 
until  the  government  of  Porto  Rico,  herein  provided  for,  shall  have 
been  organized,  when  all  moneys  theretofore  collected  under  the  pro- 
visions hereof,  then  unexpended,  shall  be  transferred  to  the  local 
treasury  of  Porto  Rico." 

Now,  there  can  be  no  doubt  whatever  that,  if  the  legislative  as- 
sembly of  Porto  Rico  should,  with  the  consent  of  Congress,  lay  a  tax 
upon  goods  arriving  from  ports  of  the  United  States,  such  tax,  if 
legally  imposed,  would  be  a  duty  upon  imports  to  Porto  Rico,  and 
not  upon  exports  from  the  United  States;  and  we  think  the  same 
result  must  follow,  if  the  duty  be  laid  by  Congress  in  the  interest 
and  for  the  benefit  of  Porto  Rico.  The  truth  is,  that,  in  imposing 
the  duty  as  a  temporary  expedient,  with  a  proviso  that  it  may  be 
abolished  by  the  legislative  assembly  of  Porto  Rico,  at  its  will,  Con- 
gress thereby  shows  that  it  is  undertaking  to  legislate  for  the  island 
for  the  time  being  and  only  until  the  local  government  is  put  into 
operation.  The  mere  fact  that  the  duty  passes  through  the  hands  of 
the  revenue  officers  of  the  United  States  is  immaterial,  in  view  of 
the  requirement  that  it  shall  not  be  covered  into  the  general  fund 
of  the  Treasury,  but  be  held  as  a  separate  fund  for  the  government 
and  benefit  of  Porto  Rico. 

These  duties  were  properly  collected,  and  the  action  of  the  circuit 


230  LIMITATIONS  OF  THE  TAXING  POWEK. 

court  in  sustaining  the  demurrer  to  the  complaint  was  correct,  and 
it  is  therefore 

Affirmed. 

In  Downes  v.  Bidwell,  182  U.  S.  245,  it  was  held  that  the  uniformity  clause 
in  the  United  States  constitution  did  not  affect  that  part  of  the  territory  of  the 
United  Sta-tes  which  had  not  been  formally  incorporated  into  the  United 
States  and  thus  made  subject  to  the  provisions  of  the  constitution  by  act  of 
Congress. 


CHAPTER   IV. 
THE  PURPOSES  FOR  WHICH  TAXES  MAY  BE  LAID. 

LOAN  ASSOCIATION  Y.  TOPEKA. 

Supreme  Court  of  the  United  States.    October,  1874. 
20  Wallace,  655. 

The  Citizens'  Saving  and  Loan  Association  of  Cleveland  brought 
their  action  in  the  court  below,  against  the  city  of  Topeka,  on 
coupons  for  interest  attached  to  bonds  of 'the  city  of  Topeka. 

The  bonds  on  their  face  purported  to  be  payable  to  the  King 
Wrought-Iron  Bridge  Manufacturing  and  Iron-Works  Company,  of 
Topeka,  to  aid  and  encourage  that  company  in  establishing  and 
operating  bridge  shops  in  said  city  of  Topeka,  under  and  in  pur- 
suance of  section  twenty-six  of  an  act  of  the  legislature  of  the  State 
of  Kansas,  entitled  "An  act  to  incorporate  cities  of  the  second  class," 
approved  February  29th,  1872 ;  and  also  of  another  "Act  to  author- 
ize cities  and  counties  to  issue  bonds  for  the  purpose  of  building 
bridges,  aiding  railroads,  water-power,  or  other  works  of  internal  im- 
provement/' approved  March  2d,  1872. 

The  citv  issued  one  hundred  of  these  bonds  for  $1,000  each,  as  a 
donation  (and  so  it  was  stated  in  the  declaration),  to  encourage  that 
company  in  its  design  of  establishing  a  manufactory  of  iron  bridges 
in  that  city. 

The  declaration  also  alleged  that  the  interest  coupons  first  due  were 
paid  out  of  a  fund  raised  by  taxation  for  that  purpose,  and  that 
after  this  payment  the  plaintiff  became  the  purchaser  of  the  bonds 
and  coupons  on  which  suit  was  brought,  for  value. 

A  demurrer  was  interposed  by  the  city  of  Topeka  to  this  declara- 
tion. 

The  single  question,  .  .  .  ."; .  for  consideration  raised  by 
the  demurrer  was  the  authority  of  the  legislature  of  the  State  of 
Kansas  to  enact  this statute. 

The  court  below  denied  the  authority,  placing  the  denial  on  two 
grounds : 

2nd.     That  the  act  authorized  the  towns  and  other  municipalities 

231 


232  PUEPOSES  FOK  WHICH  TAXES  LAID. 

to  which  it  applied,  by  issuing  bonds  or  lending  their  credit,  to  take 
the  property  of  the  citizen  under  the  guise  of  taxation  to  pay  these 
bonds,  and  use  it  in  the  aid  of  the  enterprise  of  others  which  were 
not  of  a  public  character;  that  this  was  a  perversion  of  the  right  of 
taxation,  which  could  only  be  exercised  for  a  public  use,  to  the  aid 
of  individual  interests  and  personal  purposes  of  profit  and  gain. 

The  court  below,  accordingly,  sustaining  the  demurrer,  gave  judg- 
ment in  favor  of  the  defendant,  the  city  of  Topeka;  and  to  its  judg- 
ment this  writ  of  error  was  taken. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 
~Two  grounds  are  taken  in  the  opinion  of  the  circuit  judge  and  in 
the  argument  of  the  counsel  for  defendant,  on  which  it  is  insisted 
that  the  section  of  the  statute  of  February  29th,  1872,  on  which  the 
main  reliance  is  placed  to  issue  the  bonds,  is  unconstitutional. 

.....  We  find  ample  reason  to  sustain  the  demurrer  on 
the  second  ground  on  which  it  is  argued  by  counsel  and  sustained 
by  the  Circuit  Court. 

That  proposition  is  that  the  act  authorizes  the  towns  and  other 
municipalities  to  which  it  applies,  by  issuing  bonds  or  loaning  their 
credit,  to  take  the  property  of  the  citizen  under  the  guise  of  taxa- 
tion to  pay  these  bonds,  and  use  it  in  the  aid  of  the  enterprises  of 
others  which  are  not  of  a  public  character,  thus  perverting  the  right 
of  taxation,  which  can  only  be  exercised  for  a  public  use,  to  the  aid 
of  individual  interests  and  personal  purposes  of  profit  and  gain. 

The  proposition  as  thus  broadly  stated  is  not  new,  nor  is  the  ques- 
tion which  it  raises  difficult  of  solution. 

If  these  municipal  corporations,  which  are  in  fact  subdivisions  of 
'the  State,  and  which  for  many  reasons  are  vested  with  quasi-legis- 
lative powers,  have  a  fund  or  other  property  out  of  which  they  can 
pay  the  debts  which  they  contract,  without  resort  to  taxation,  it  may 
be  within  the  power  of  the  legislature  of  the  State  to  authorize  them 
to  use  it  in  aid  of  projects  strictly  private  or  personal,  but  which 
would  in  a  secondary  manner  contribute  to  the  public  good ;  or  where 
there  is  property  or  money  vested  in  a  corporation  of  the  kind  for  a 
particular  use,  as  public  worship  or  charity,  the  legislature  may  pass 
laws  authorizing  them  to-  make  contracts  in  reference  to  this  prop- 
erty, and  incur  debts  payable  from  that  source. 

But  such  instances  are  few  and  exceptional,  and  the  proposition  is 
a  very  broad  one,  that  debts  contracted  by  municipal  corporations 
must  be  paid,  if  at  all,  out  of  taxes  which  they  may  lawfully  levy, 
and  that  all  contracts  creating  debts  to  be  paid  in  future,  not  limited 


LOAN  ASSOCIATION  V.  TOPEKA.  233 

to  payment  from  some  other  source,  imply  an  obligation  to  pay  by 
taxation. 

It  follows  that  in  this  class  of  cases  the  right  to  contract  must  be 
limited  by  the  right  to  tax,  and  if  in  the  given  case  no  tax  can  be 
lawfully  levied  to  pay  the  debt,  the  contract  itself  is  void  for  want 
of  authority  to  make  it. 

If  this  were  not  so,  these  corporations  could  make  valid  promises, 
which  they  have  no  means  of  fulfilling,  and  on  which  even  the  legis- 
lature that  created  them  can  confer  no  such  power.  The  validity  of 
a  contract  which  can  only  be  fulfilled  by  a  resort  to  taxation,  de- 
pends on  the  power  to  levy  a  tax  for  the  purpose.  (Sharpless  v. 
Mayor  of  Philadelphia,  21  Pa.  St.  147,  167;  Hanson  v.  Vernon,  2? 
Iowa,  28;  Allen  v.  Inhabitants  of  Jay,  60  Me.  127;  Lowell  v.  Bos- 
ton, 111  Mass.  454;  Whiting  v.  Fond  du  Lac,  25  Wis.  188.) 

It  is  therefore  to  be  inferred,  that  when  the  legislature  of  the 
State  authorizes  a  city  or  county  to  contract  a  debt  by  bond,  it  in- 
tends to  authorize  it  to  levy  such  taxes  as  are  necessary  to  pay  the 
debt,  unless  there  is  in  the  act  itself,  or  in  some  general  statute, 
a  limitation  upon  the  power  of  taxation  which  repels  such  an  in- 
ference. 

With  these  remarks  and  with  the  reference  to  the  authorities 
which  support  them,  we  assume  that  unless  the  legislature  of  Kansas 
had  the  right  to  authorize  the  counties  and  towns  in  that  State  to 
levy  taxes  to  be  used  in  aid  of  manufacturing  enterprises,  conducted 
by  individuals,  or  private  corporations,  for  purposes  of  gain,  the  law 
is  void,  and  the  bonds  issued  under  it  are  also  void.  We  proceed  to 
the  inquiry  whether  such  a  power  exists  in  the  legislature  of  the 
State  of  Kansas. 

We  have  already  said  the  question  is  not  new.  The  subject  of  the 
aid  voted  to  railroads  by  counties  and  towns  has  been  brought  to  the 
attention  of  the  courts  of  almost  every  State  in  the  Union.  It  has 
been  thoroughly  discussed  and  is  still  the  subject  of  discussion  in 
those  courts.  It  is  quite  true  that  a  preponderance  of  authority  is 
to  be  found  in  favor  of  the  proposition  that  the  legislatures  of  the 
States,  unless  restricted  by  some  special  provisions  of  their  constitu- 
tions, may  confer  upon  these  municipal  bodies  the  right  to  take  stock 
in  corporations  created  to  build  railroads,  and  to  lend  their  credit  to 
such  corporations.  Also  to  levy  the  necessary  taxes  on  the  inhabi- 
tants, and  on  property  within  their  limits  subject  to  general  tax- 
ation, to  enable  them  to  pay  the  debts  thus  incurred.  But  very  few 
of  these  courts  have  decided  this  without  a  division  among  the  judges 
of  which  they  were  composed,  while  others  have  decided  against  the 


234  PURPOSES  FOR  WHICH  TAXES  LAID. 

existence  of  the  power  altogether.  (The  State  v.  Wapello  County,  9 
Iowa,  308;  Hanson  v.  Vernon,  27  Id.  28;  Sharpless  v.  Mayor,  21 
Pa.  St.  147;  Whiting  v.  Fond  du  Lac,  25  Wis.  188.) 

In  all  these  cases,  however,  the  decision  has  turned  upon  the  ques- 
tion whether  the  taxation  by  which  this  aid  was  afforded  to  the 
building  of  railroads  was  for  a  public  purpose.  Those  who  came  to 
the  conclusion  that  it  was,  held  the  laws  for  that  purpose  valid. 
Those  who  could  not  reach  that  conclusion  held  them  void.  In  all 
the  controversy  this  has  been  the  turning-point  of  the  judgments  of 
the  courts.  And  it  is  safe  to  say  that  no  court  has  held  debts  cre- 
ated in  aid  of  railroad  companies,  by  counties  or  towns,  valid  on  any 
other  ground  than  that  the  purpose  for  which  the  taxes  were  levied 
was  a  public  use,  a  purpose  or  object  which  it  was  the  right  and  the 
duty  of  State  governments  to  assist  by  money  raised  from  the  people 
by  taxation.  The  argument  in  opposition  to  this  power  has  been, 
that  railroads  built  by  corporations  organized  mainly  for  purposes 
of  gain — the  roads  which  they  built  being  under  their  control,  and 
not  that  of  the  State — were  private  and  not  public  roads,  and  the  tax 
assessed  on  the  people  went  to  swell  the  profits  of  individuals  and 
not  to  the  good  of  the  State,  or  the  benefit  of  the  public,  except  in  a 
remote  and  collateral  way.  On  the  other  hand  it  was  said  that  roads, 
canals,  bridges,  navigable  streams  and  all  other  highways  had  in  all 
times  been  matter  of  public  concern.  That  such  channels  of  travel 
and  of  the  carrying  business  had  always  been  established,  improved, 
regulated  by  the  State,  and  that  the  railroad  had  not  lost  this  char- 
acter because  constructed  by  individual  enterprise,  aggregated  into  a 
corporation. 

We  are  not  prepared  to  say  that  the  latter  view  of  it  is  not  the 
true  one,  especially  as  there  are  other  characteristics  of  a  public  na- 
ture conferred  on  these  corporations,  such  as  the  power  to  obtain^ 
right  of  way,  their  subjection  to  the  laws  which  govern  common  car- 
riers, and  the  like,  which  seem  to  justify  the  proposition.  Of  the 
disastrous  consequences  which  have  followed  its  recognition  by  the 
courts  and  which  were  predicted  when  it  was  first  established  there 
•can  be  no  doubt. 

We  have  referred  to  this  history  of  the  contest  over  aid  to  railroads 
by  taxation  to  show  that  the  strongest  advocates  for  the  validity  of 
these  laws  never  placed  it  on  the  ground  of  the  unlimited  power  in 
the  State  legislature  to  tax  the  people,  but  conceded  that  where  the 
purpose  for  which  the  tax  was  to  be  issued  could  no  longer  be 
justly  claimed  to  have  this  public  character,  but  was  purely  in  aid 
of  private  or  personal  objects,  the  law  authorizing  it  was  beyond  the 


LOAN  ASSOCIATION  V.  TOPKKA.  3:1:, 

legislative  power,  and  was  an  unauthorized  invasion  of  private  right. 
(Okott  v.  Supervisors,  16  Wallace,  689;  People  v.  Salem,  20  Mich- 
igan, 152;  Jenkins  v.  Andover,  103  Mass.  94;  Dillon  on  Municipal 
Corporations,  §  587;  Redfield's  Laws  of  Eailways,  398,  rule  2.) 

It  must  be  conceded  that  there  are  such  rights  in  every  free  gov- 
ernment beyond  the  control  of  the  State.  A  government  which  rec- 
ognized no  such  rights,  which  held  the  lives,  the  liberty  and  the 
property  of  its  citizens  subject  at  all  times  to  the  absolute  disposition 
and  unlimited  control  of  even  the  most  democratic  depository  01 
power,  is,  after  all,  but  a  despotism.  It  is  true  it  is  a  despotism  of 
the  many,  of  the  majority,  if  you  choose  to  call  it  so,  but  it  is  none 
the  less  a  despotism.  It  may  well  be  doubted  if  a  man  is  to  hold" 
all  that  he  is  accustomed  to  call  his  own,  all  in  which  he  has  placed 
his  happiness,  and  the  security  of  which  is  essential  to  that  happi- 
ness, under  the  unlimited  dominion  of  others,  whether  it  is  not  wiser 
that  this  power  should  be  exercised  by  one  man  than  by  many. 

The  theory  of  our  governments,  State  and  National,  is  opposed 
to  the  deposit  of  unlimited  power  anywhere.  The  executive,  the 
legislative  and  the  judicial  branches  of  these  governments  are  all  of 
limited  and  defined  powers. 

There  are  limitations  on  such  power  which  grow  out  of  the  essen- 
tial nature  of  all  free  governments.  Implied  reservations  of  indi- 
vidual rights,  without  which  the  social  compact  could  not  exist,  and 
which  are  respected  by  all  governments  entitled  to  the  name.  No 
'court,  for  instance,  would  hesitate  to  declare  void  a  statute  which 
enacted  that  A.  and  B.  who  were  husband  and  wife  to  each  other 
should  be  so  no  longer,  but  that  A.  should  thereafter  be  the  husband 
of  C.,  and  B.  the  wife  of  D.  Or  which  should  enact  that  the  home- 
stead now  owned  by  A.  should  no  longer  be  his,  but  should  hence- 
forth be  the  property  of  B.  (Whiting  v.  Fond  du  Lac,  25  Wis.  188; 
Cooley  on  Constitutional  Limitations,  129,  175,  487;  Dillon  on  Mu- 
nicipal Corporations,  §  587.) 

Of  all  the  powers  conferred  upon  government  that  of  taxation  may 
be  lawfully  used  and  the  extent  of  its  exercise  is  in  its  very  nature 
unlimited.  It  is  true  that  express  limitation  on  the  amount  of  tax 
to  be  levied  or  the  things  to  be  taxed  may  be  imposed  by  constitu- 
tion or  statute,  but  in  most  instances  for  which  taxes  are  levied,  as 
the  support  of  the  government,  the  prosecution  of  war,  the  National 
defence,  any  limitation  is  unsafe.  The  entire  resources  of  the  people 
should,  in  some  instances,  be  at  the  disposal  of  the  government. 

The  power  to  tax,  therefore,  is  the  strongest,  the  most  pervading 
of  all  the  powers  of  government,  reaching  directly  or  indirectly  to 


236  PURPOSES  FOR  WHICH  TAXES  LAID. 

all  classes  of  the  people.  It  was  said  by  Chief  Justice  Marshall  in 
the 'case  of  McCullough  v.  The  State  of  Maryland,  (4  Wheaton  431), 
that  the  power  to  tax  is  the  power  to  destroy.  A  striking  instance 
of  the  truth  of  the  proposition  is  seen  in  the  fact  that  the  existing 
tax  of  ten  per  cent  imposed  by  the  United  States  on  the  circulation 
of  all  other  banks  than  the  National  banks,  drove  out  of  existence 
every  state  bank  of  circulation  within  a  year  or  two  after  its  passage. 
This  power  can  as  readily  be  employed  against  one  class  of  individ- 
uals and  in  favor  of  another,  so  as  to  ruin  the  one  class  and  give 
unlimited  wealth  and  prosperity  to  the  other,  if  there  is  no  implied 
limitation  of  the  uses  for  which  the  power  may  be  exercised. 

To  lay  with  one  hand  the  power  of  the  government  on  the  property 
of  the  citizen,  and  with  the  other  to  bestow  it  upon  favored  indi- 
viduals to  aid  private  enterprises  and  build  up  private  fortunes,  is 
none  the  less  a  robbery  because  it  is  done  under  the  forms  of  law 
and  is  called  taxation.  This  is  not  legislation.  It  is  a  decree  under 
legislative  forms. 

Nor  is  it  taxation.  A  "tax,"  says  Webster's  Dictionary,  "is  a  rate 
or  sum  of  money  assessed  on  the  person  or  property  of  a  citizen  by 
government  for  the  use  of  nation  or  state."  "Taxes  are  burdens  or 
charges  imposed  by  the  legislature  upon  persons  or  property  to  raise 
money  for  public  purposes."  Cooley  on  Const.  Lim.  479. 

Coulter,  J.,  in  Northern  Liberties  v.  St.  John's  Church,  13  Pa. 
St.  104  (see,  also,  Pray  v.  Northern  Liberties,  31  Id.  69;  Matter 
of  Mayor  of  New  York,  11  Johnson,  77;  Camden  v.  Allen,  2  Dutcher 
398;  Sharpless  v.  Mayor  of  Philadelphia,  supra;  Hanson  v.  Vernon, 
27  Iowa,  47;  Whiting  v.  Fond  du  Lac,  25  Wis.  188)  says,  very  for- 
cibly, "I  think  the  common  mind  has  everywhere  taken  in  the  un- 
derstanding that  taxes  are  a  public  imposition,  levied  by  authority 
of  the  government  for  the  purpose  of  carrying  on  the  government  in 
all  its  machinery  and  operations — that  they  are  imposed  for  a  pub- 
lic purpose." 

We  have  established,  we  think,  beyond  cavil  that  there  can  be  no 
lawful  tax  which  is  not  laid  for  a  public  purpose.  It  may  not  bo 
easy  to  draw  the  line  in  all  cases  so  as  to  decide  what  is  a  public 
purpose  in  this  sense  and  what  is  not. 

It  is  undoubtedly  the  duty  of  the  legislature  which  imposes  or 
authorizes  municipalities  to  impose  a  tax  to  see  that  it  is  not  to  be 
used  for  purposes  of  private  interest  instead  of  public  use  and  tho 
courts  can  only  be  justified  in  interposing  when  a  violation  of  this 
principle  is  clear  and  the  reason  for  interference  cogent.  And  in 
deciding  whether,  in  the  given  case,  the  object  for  which  the  taxes 


LOAN  ASSOCIATION  V.  TOPEKA.  237 

are  assessed  falls  upon  the  one  side  or  the  other  of  this  line  they 
must  be  governed  mainly  by  the  course  and  usage  of  the  government, 
the  objects  for  which  taxes  have  been  customarily  and  by  long 
course  of  legislation  levied,  what  objects  or  purposes  have  been  con- 
sidered necessary  to  the  support  and  for  the  proper  use  of  the  gov- 
ernment, whether  State  or  municipal.  Whatever  lawfully  pertains 
to  this  and  is  sanctioned  by  time  and  the  acquiescence  of  the  people 
may  well  be  held  to  belong  to  the  public  use,  and  proper  for  the 
maintenance  of  good  government,  though  this  may  not  be  the  only 
criterion  of  rightful  taxation. 

But  in  the  case  before  us,  in  which  the  towns  are  authorized  to 
contribute  aid  by  way  of  taxation  to  any  class  of  manufacturers, 
there  is  no  difficulty  in  holding  that  this  is  not  such  a  public  pur- 
pose as  we  have  been  considering.  If  it  be  said  that  a  benefit  results 
to  the  local  public  of  a  town  by  establishing  manufactures,  the  same 
may  be  said  of  any  other  business  or  pursuit  which  employs  capital 
or  labor.  The  merchant,  the  mechanic,  the  innkeeper,  the  banker, 
the  builder,  the  steamboat  owner  are  equally  the  promoters  of  the 
public  good,  and  equally  deserving  the  aid  of  the  citizens  by  forced 
contributions.  No  line  can  be  drawn  in  favor  of  the  manufacturer 
which  would  not  open  the  coffers  of  the  public  treasury  to  the  im- 
portunities of  two-thirds  of  the  business  men  of  the  city  or  town. 

A  reference  to  one  or  two  cases  adjudicated  by  courts  of  the  highest 
character  will  be  sufficient,  if  any  authority  were  needed,  to  sustain 
us  in  this  proposition. 

In  the  case  of  Allen  v.  The  Inhabitants  of  Jay,  (60  Me.  124), 
the  town  meeting  had  voted  to  loan  their  credit  to  the  amount  of 
$10,000  to  Hutchins  and  Lane,  if  they  would  invest  $12,000  in  a 
steam  saw-mill,  grist-mill,  and  box-factory  machinery,  to  be  built  in 
that  town  by  them.  There  was  a  provision  to  secure  the  town  by 
mortgage  on  the  mill,  and  the  selectmen  were  authorized  to  issue 
town  bonds  for  the  amount  of  the  aid  so  voted.  Ten  of  the  tax- 
able inhabitants  of  the  town  filed  a  bill  to  enjoin  the  selectmen  from 
issuing  the  bonds. 

The  Supreme  Judicial  Court  of  Maine,  in  an  able  opinion  by  Chief 
Justice  Appleton,  held  that  this  was  not  a  public  purpose,  and  that 
the  town  could  levy  no  taxes  on  the  inhabitants  in  aid  of  the  enter- 
prise, and  could,  therefore,  issue  no  bonds,  though  a  special  act  of 
the  legislature  had  ratified  the  vote  of  the  town,  and  they  granted 
the  injunction  as  prayed  for. 

Shortly  after  the  disastrous  fire  in  Boston,  in  1872,  which  laid  an 
important  part  of  the  city  in  ashes,  the  governor  of  the  State  con- 


238  PURPOSES  FOR  WHICH  TAXES  LAID. 

vened  the  legislative  body  of  Massachusetts,  called  the  General  Court, 
for  the  express  purpose  of  affording  some  relief  to  the  city  and  its 
people  from  the  sufferings  consequent  on  this  great  calamity.  A 
statute  was  passed,  among  others,  which  authorized  the  city  to  issue 
its  bonds  to  an  amount  not  exceeding  twenty  millions  of  dollars, 
which  bonds  were  to  be  loaned,  under  proper  guards  for  securing  the 
city  from  loss,  to  the  owners  of  the  ground  whose  buildings  had  been 
destroyed  by  fire,  to  aid  them  in  rebuilding. 

In  the  case  of  Lowell  v.  The  City  of  Boston,  in  the  Supreme  Ju- 
dicial Court  of  Massachusetts,  the  validity  of  this  act  was  consid- 
ered. We  have  been  furnished  a  copy  of  the  opinion,  though  it  is 
not  yet  reported  in  the  regular  series  of  that  court.  The  American 
Law  Review  for  July,  1873,  says  that  the  question  was  elaborately 
and  ably  argued.  The  court,  in  an  able  and  exhaustive  opinion,  de- 
cided that  the  law  was  unconstitutional,  as  giving  the  right  to  tax 
other  than  for  a  public  purpose. 

The  same  court  had  previously  decided,  in  the  case  of  Jenkins  v. 
Andover,  (103  Mass.  741),  that  a  statute  authorizing  the  town  au- 
thorities to  aid  by  taxation  a  school  established  by  the  will  of  a  citi- 
zen, and  governed  by  trustees  selected  by  the  will,  was  void  because 
the  school  was  not  under  the  control  of  the  town  officers,  and  was 
not,  therefore,  a  public  purpose  for  which  taxes  could  be  levied  on 
the  inhabitants. 

The  same  principle  exactly  was  decided  by  the  state  court  of  Wis- 
consin in  the  case  of  Curtis  v.  Wliipple,  (24  Wis.  350).  In  that 
case  a  special  statute  which  authorized  the  town  to  aid  the  Jefferson 
Liberal  Institute  was  declared  void  because,  though  a  school  of  learn- 
ing, it  was  a  private  enterprise  not  under  the  control  of  the  town 
authorities.  In  the  subsequent  case  of  Whiting  v.  Fond  du  Lac. 
already  cited,  the  principle  is  fully  considered  and  reaffirmed. 

These  cases  are  clearly  in  point,  and  they  assert  a  principle  which 
meets  our  cordial  approval. 

Judgment  affirmed. 
Mr.  Justice  CLIFFORD  dissenting. 


LOWELL  V.  CITY  OF  BOSTON.  239 

LOWELL  V.  CITY  OF  BOSTON. 

Supreme  Judicial  Court   of  Massachusetts.     March,  1873. 
Ill  Mass.  4^4. 

WELLS,  J.  This  is  a  proceeding  under  the  provisions  of  the  Gen. 
Sts.,  c.  18,  §  79,  to  restrain  the  city  of  Boston  from  issuing  its  bonds 
for  the  purpose  of  raising  a  fund  to  be  appropriated  to  the  object  of 
rendering  aid,  by  way  of  loans,  in  rebuilding  upon  that  portion  of 
the  city  which  was  burned  over  in  November,  1872.  The  issue  of 
bonds  for  that  purpose,  to  an  amount  not  exceeding  $20,000,000,  was 
expressly  authorized  by  the  St.  of  1872,  c.  364.  The  question,  there- 
fore, is  distinctly  presented  whether  the  authority  thus  conferred 
upon  the  city  is  contrary  to  the  provisions  of  the  Constitution  of  the 
Commonwealth. 

The  power  to  levy  taxes  is  founded  on  the  right,  duty  and  re- 
sponsibility to  maintain  and  administer  all  the  governmental  func- 
tions of  the  State,  and  to  provide  for  the  public  welfare.  To  justify 
any  exercise  of  the  power  requires  that  the  expenditure  which  it  i? 
intended  to  meet  shall  be  for  some  public  service,  or  some  object 
which  concerns  the  public  welfare.  The  promotion  of  the  interests 
of  individuals,  either  in  respect  of  property  or  .business,  although  it 
may  result  incidentally  in  the  advancement  of  the  public  welfare,  is, 
in  its  essential  character,  a  private  and  not  a  public  object.  However 
fcertain  and  great  the  resulting  good  to  the  general  public,  it  does 
not,  by  reason  of  its  comparative  importance,  cease  to  be  incidental. 
The  incidental  advantage  to  the  public,  or  to  the  State,  which  re- 
sults from  the  promotion  of  private  interests,  and  the  prosperity  of 
private  enterprises  or  business,  does  not  justify  their  aid  by  the  use 
of  public  money  raised  by  taxation,  or  for  which  taxation  may  be- 
come necessary.  It  is  the  essential  character  of  the  direct  object  of 
the  expenditure  which  must  determine  its  validity,  as  justifying  a 
tax,  and  not  the  magnitude  of  the  interest  to  be  affected,  nor  the 
degree  to  which  the  general  advantage  of  the  community,  and  thus- 
the  public  welfare,  may  be  benefited  by  their  promotion. 

The  principle  of  this  distinction  is  fundamental.  It  underlies  all 
government  that  is  based  on  reason  rather  than  upon  force.  It  is 
expressed  in  various  forms  in  the  Constitution  of  Massachusetts.  In 
Art.  XI  of  c.  2,  §  1,  by  restricting  the  issuing  of  moneys  from  the 
treasury  to  purposes  of  "the  necessary  defence  and  support  of  the 
Commonwealth;  and  for  the  protection  and  preservation  of  the  in- 


240  PURPOSES  FOR  WHICH  TAXES  LAID. 

habitants  thereof,  agreeably  to  the  acts  and  resolves  of  the  Genera] 
Court."  In  Art.  IV.  of  c.  1,  §  1,  by  declaring  the  purposes  for 
which  the  power  of  taxation,  in  its  various  forms,  may  be  exercised 
by  the  General  Court,  to  be  "for  the  public  service,  in  the  necessary 
defence  and  support  of  the  government  of  the  said  Commonwealth, 
and  the  protection  and  preservation  of  the  subjects  thereof."  The 
purport  and  scope  of  these  provisions  are  made  more  distinct,  and 
the  essential  idea  upon  which  they  rest  is  disclosed  by  reference  to 
the  preceding  Declaration  of  Rights,  by  which  the  theory  and  pur- 
pose of  this  frame  of  government  were  set  forth  by  its  founders. 
Art.  X  declares,  "Each  individual  of  the  society  has  a  right  to  be 
protected  by  it  in  the  enjoyment  of  his  life,  liberty  and  property, 
according  to  standing  laws.  He  is  obliged,  consequently,  to  contrib- 
ute his  share  to  the  expense  of  this  protection;  to  give  his  personal 
service,  or  an  equivalent,  when  necessary;  but  no  part  of  the  prop- 
erty of  any  individual  can,  with  justice,  be  taken  from  him,  or  ap- 
plied to  public  uses,  without  his  own  consent  or  that  of  the  repre- 
sentative body  of  the  people.  In  fine,  the  people  of  this  Common- 
wealth are  not  controllable  by  any  other  laws  than  those  to  which 
their  constitutional  representative  body  have  given  their  consent. 
And  whenever  the  public  exigencies  require  that  the  property  of  any 
individual  should  be  appropriated  to  public  uses,  he  shall  receive  a 
reasonable  compensation  therefor." 

The  power  of  the  government,  thus  constituted,  to  affect  the  indi- 
vidual in  his  private  rights  of  property,  whether  by  exacting  contri- 
butions to  the  general  means,  or  by  sequestration  of  specific  property, 
is  confined,  by  obvious  implication  as  well  as  by  express  terms,  to 
purposes  and  objects  alone  which  the  government  was  established  to 
promote,  to  wit,  public  uses  and  the  public  service.  This  power, 
when  exercised  in  one  form,  is  taxation;  in  the  other,  is  designated" 
as  the  right  of  eminent  domain.  The  two  are  diverse  in  respect  of 
the  occasion  and  mode  of  exercise,  but  identical  in  their  source,,  to 
wit,  the  necessities  of  organized  society;  and  in  the  end  by  which 
alone  the  exercise  of  either  can  be  justified,  to  wit,  some  public  serv- 
ice or  use.  It  is  due  to  their  identity  in  these  respects  that  the  two 
powers,  otherwise  so  unlike,  are  associated  together  in  the  same  arti- 
cle. So  far  as  it  concerns  the  question  what  constitutes  public  use 
or  service  that  will  justify  the  exercise  of  these  sovereign  powers  over 
private  rights  of  property,  which  is  the  main  question  now  to  be 
solved,  this  identity  renders  it  unnecessary  to  distinguish  between 
the  two  forms  of  exercise,  as  the  same  tests  must  apply  to  and  con- 
trol each.  An  appropriation  of  money  raised  by  taxation,  or  of  prop- 


LOWELL  V.  CITY  OF  BOSTON.  241 

erty  taken  by  right  of  eminent  domain,  by  way  of  gift  to  an  indi- 
vidual for  his  own  private  uses  exclusively,  would  clearly  be  an  ex- 
cese  of  legislative  power.  The  distinction  between  this  and  its  appro- 
priation for  the  construction  of  a  highway,  is  marked  and  obvious. 
It  is  independent  of  all  considerations  of  resulting  advantage.  The 
individual,  by  reason  of  his  capacity,  enterprise  or  situation,  might 
be  enabled  to  employ  the  money  or  property  thus  conferred  upon 
him  in  such  a  manner  as  to  furnish  employment  to  great  numbers  of 
the  community,  to  give  a  needed  impulse  to  business  of  various  kinds, 
and  thus  promote  the  general  prosperity  and  welfare.  In  this  view, 
it  might  be  shown  to  be  for  the  public  good  to  take  from  the  unen- 
terprising and  thriftless  their  unemployed  capital  and  entrust  it  to 
others  who  will  use  it  to  better  advantage  for  the  interests  of  the 
community.  But  it  needs  no  argument  to  show  that  such  an  arbi- 
trary exercise  of  power  would  be  a  violation  of  the  constitutional 
rights  of  those  from  whom  the  money  or  property  was  taken,  and  an 
unjustifiable  usurpation. 

In  the  case  of  a  highway,  on  the  other  hand,  its  direct  purpose  of 
public  use,  determines  conclusively  the  question  in  support  of  the 
exercise,  both  of  the  right  of  eminent  domain  and  of  taxation,  how- 
ever trifling  the  advantage  to  the  public  compared  with  that  to  indi- 
viduals. The  extent  or  value  of  the  public  use,  and  the  wisdom  and 
propriety  of  the  appropriation,  are  matters  to  be  determined  exclu- 
sively by  the  legislature,  either  directly  or  by  its  delegated  authority. 
When  the  power  exists  it  is  not  within  the  province  of  the  court  to 
interfere  with  its  exercise,  by  any  inquiry  into  its  expediency. 

The  two  instances,  above  referred  to,  illustrate  the  sense  in  which 
the  furthering  of  the  public  good  by  promotion  of  the  interests  of 
many  individuals,  differs  from  a  public  service.  A  public  service 
may  or  may  not  be  productive,  practically,  of  public  advantage.  Re- 
sulting advantage  to  the  public  does  not  of  itself  give  to  the  means 
by  which  it  is  produced  the  character  of  a  public  service. 

.  .  .  .  Such  an  appropriation  of  property  [i.  e.  for  a  rail- 
way company]  is  justified  and  can  only  be  justified,  by  the  public 
service  thereby  secured  in  the  increased  facilities  for  transportation 
of  freight  and  passengers,  of  which  the  whole  community  may  right- 
fully avail  itself.  The  franchises  of  the  corporation  are  held  charged 
with  this  duty  and  trust  for  the  performance  of  the  public  service, 
for  which  they  were  granted.  Commonwealth  v.  Wilkinson,  16  Pick. 
175.  Same  v.  Boston  &  Maine  Railroad,  3  Gush.  25,  45.  Old  Col- 

16 


242  PURPOSES  FOIl  WHICH  TAXES  LAID. 

ony  &  Fall  River  Railroad  Co.  v.  County  of  Plymouth,  14  Gray  155, 
161. 

This  right  of  eminent  domain  is  often  allowed  to  be  exercised  in 
favor  of  private  aqueduct  companies.  Here,  too,  the  public  service, 
intended  as  the  object  of  the  grant  of  the  right,  is  obvious.  And 
although  the  interests  of  the  aqueduct  company  are  ordinarily  relied 
upon  to  secure  the  proper  performance  of  the  service,  yet,  in  case  of 
any  failure  or  abuse,  the  obligation  may  doubtless  be  otherwise  en- 
forced. Lumbard  v.  Stearns,  4  Gush.  60. 

There  is  no  public  use  or  public  service  declared  in  the  statute  now 
under  consideration,  and  we  are  of  opinion  that  none  can  be  found 
in  the  purposes  of  its  provisions.  By  its  terms  the  proceeds  of  the 
bonds,  thereby  authorized,  are  to  be  expended  in  loans  to  persons 
who  are  or  may  become  owners  of  land  in  Boston,  "the  buildings 
upon  which  were  burned  by  the  fire  in  said  Boston  on  the  ninth  and 
tenth  days  of  November,"  1872.  The  ultimate  end  and  object  of  the 
expenditure,  as  indicated  by  the  provisions  of  the  statute  itself,  is 
"to  insure  the  speedy  rebuilding  on  said  land." 

The  general  result  may  indeed  be  thus  stated  collectively,,  as  a 
single  object  of  attainment;  but  the  fund  raised  is  intended  jto  be 
appropriated  distributively,  by  separate  loans  to  numerous  individ- 
uals, each  one  of  which  will  be  independent  of  any  relation  to  the 
others,  or  to  any  general  purpose,  except  that  of  aiding  individual 
enterprise  in  matters  of  private  business.  The  property  thus  created 
will  remain  exclusively  private  property,  to  be  devoted  to  private 
uses  at  the  discretion  of  the  owners  of  the  land;  with  no  restriction 
as  to  the  character  of  the  buildings  to  be  erected,  or  the  uses  to 
which  they  shall  be  devoted;  and  with  no  obligation  to  render  any 
service  or  duty  to  the  Commonwealth  or  to  the  city, — except  to  repay 
the  loan, — or  to  the  community  at  large  or  any  part  of  it.  If  it  be 
assumed  that  the  private  interests  of  the  owners  will  lead  them  to 
reestablish  warehouses,  shops,  manufactories  and  stores ;  and  that  the 
trade  and  business  of  the  place  will  be  enlarged  or  revived  by  means 
of  the  facilities  thus  provided;  still  these  are  considerations  of  pri- 
vate interest  and  if  expressly  declared  to  be  the  aim  and  purpose  of 
the  act  they  would  not  constitute  a  public  object  in  a  legal  sense. 

As  a  judicial  question  the  case  is  not  changed  by  the  magnitude 
of  the  calamity  which  has  created  the  emergency;  nor  by  the  great- 
ness of  the  emergency  or  the  extent  and  importance  of  the  interests 
to.be  promoted.  These  are  considerations  affecting  only  the  pro- 
priety and  expediency  of  the  expenditure  as  a  legislative  question.  If 


UNITED  STATES  V.  REALTY  COMPANY.  243 

the  expenditure  is  in  its  nature  such  as  will  justify  taxation  under 
any  state  of  circumstances  it  belongs  to  the  Legislature  exclusively 
to  determine  whether  it  shall  be  authorized  in  the  particular  case; 
and  however  slight  the  emergency  or  limited  or  unimportant  the 
interests  to  be  promoted  thereby,  the  court  has  no  authority  to  revise 
the  legislative  action. 

On  the  other  hand,  if  its  nature  is  such  as  not  to  justify  taxa- 
tion in  any  and  all  cases  in  which  the  Legislature  might  see  fit  to 
give  authority  therefor,  no  stress  of  circumstances  affecting  the  expe- 
diency, importance  or  general  desirableness  of  the  measure,  and  no 
concurrence  of  legislative  and  municipal  action,  or  preponderance  of 
popular  favor  in  any  particular  case,  will  supply  the  element  neces- 
sary to  brinsr  it  within  the  scope  of  legislative  power. 

The  expenditure  authorized  by  this  statute  being  for  private  and 
not  for  public  objects,  in  a  legal  sense,  it  exceeds  the  constitutional 
powers  of  the  Legislature;  and  the  city  cannot  lawfully  issue  the 
bonds  for  the  purposes  of  the  act. 

This  discussion  has,  for  obvious  reasons,  taken  a  somewhat  wider 
range  than  was  required  for  the  decision  of  the  case  immediately 
before  us.  We  have  purposely  confined  it  to  the  consideration  of 
judicial  decisions  and  utterances  in  Massachusetts;  because  the  ques- 
tion is  of  legislative  power  under  the  Constitution  of  this  Common- 
wealth. The  recent  decision  of  the  Supreme  Judicial  Court  of 
Maine  however,  in  the  case  of  Allen  v.  Jay,  60  Maine,  124,  to  which 
we  are  referred,  is  of  especial  significance  and  importance  from  the 
similarity  in  the  organic  law  of  the  two  states  and  the  almost  exact 
identity  of  the  question  presented  by  the  facts.  It  fully  sustains  the 
conclusions  to  which  we  have  been  led  in  this  case. 

Demurrer  overruled.     Injunction  ordered. 


UNITED  STATES  V.  REALTY  COMPANY. 
UNITED  STATES  V.  GAY. 

Supreme  Court  of  the  United  States.     October,  1895. 
163  United  States  427. 

Mr.  Justice  PECKHAM  delivered  the  opinion  of  the  court. 

These  are  writs  of  error  to  the  Circuit  Court  of  the  United  States 
for  the  Eastern  District  of  Louisiana.  The  actions  were  brought  in 
that  court  under  the  second  section  of  the  act  approved  March  3, 


244  PURPOSES  FOR  WHICH  TAXES  LAID. 

1887,  c.  359,  24  Stat.  505,  commonly  known  as  the  Tucker  act. 
Both  actions  were  brought  to  obtain  payment  of  moneys  by  reason 
of  the  legislation  of  Congress  in  regard  to  sugar  bounties.  The  court 
below  in  each  case  gave  judgment  for  the  plaintiffs  therein,  and  the 
government  by  writ  of  error  brings  the  cases  here  for  review. 

Counsel  for  the  government  admit  that  the  plaintiff  in  each  case 
has  complied  with  all  the  terms  and  conditions  of  the  act  in  order 
to  entitle  each  to  recover  the  moneys  demanded  in  these  suits  under 
the  act  of  1895,  provided  that  act  is  constitutional  and  valid.  If  it 
be,  the  judgment  in  each  case  must  be  affirmed. 

The  proper  disbursing  officer  of  the  Treasury  refused  to  pay  the 
warrants  drawn  upon  the  treasury  in  these  cases  upon  the  sole  ground 
that  the  act  is  unconstitutional.  He  has  been  fortified  in  his  opinion 
and  action  by  the  views  expressed  in  the  Court  of  Appeals  of  the 
District  of  Columbia,  in  the  case  of  the  United  States  ex  rel.  Miles 
Planting  &  Manufacturing  Go.  v.  Carlisle,  reported  in  5  D.  C.  App. 
138.  That  company,  which  was  a  Louisiana  corporation  engaged  in 
the  sugar  business,  claimed  that  the  repealing  portion  of  the  act  of 
August  28,  1894,  was  not  effective  so  as  to  cut  off  the  rights  of  per- 
sons who  had  prior  to  its  passage  procured  licenses  for  the  fiscal  year 
beginning  July  1,  1894,  and  had  expended  money  thereunder.  The 
company  therefore  applied  to  the  Supreme  Court  of  the  District  of 
Columbia  for  a  writ  of  mandamus  against  the  Secretary  of  the  Treas- 
ury and  the  Commissioner  of  Internal  Revenue  to  compel  action  on 
their  part  under  the  act  of  1890.  The  application  was  resisted  by 
the  government  upon  several  grounds,  among  others,  that  the  bounty 
legislation  of  1890  was  unconstitutional.  The  motion  was  denied 
upon  all  the  grounds  set  up  by  the  government,  including  that  of 
unconstitutionality.  Mr.  Justice  Shepard  delivered  the  opinion  of 
the  court  and  Mr.  Justice  Morris  concurred  with  him  upon  all  points. 
Mr.  Chief  Justice  Alvey  expressed  no  opinion  upon  the  constitutional 
question  because  the  conclusion  that  Congress  had  power  to  repeal 
the  provision  giving  the  bounty  for  sugar  rendered  it  unnecessary  to 
pass  upon  the  unconstitutionality  of  the  original  bounty  clause. 

It  was  by  reason  of  this  opinion  upon  the  validity  of  the  bounty 
legislation  of  1890  that  the  Comptroller  of  the  Treasury  ree'xam- 
ined  the  rulings  which  had  been  previously  made  in  approving  bounty 
claims  theretofore  presented;  and  he  had  concluded  to  and  did  refer 
another  case  involving  this  question,  then  before  him,  to  the  Courf 
of  Claims  for  its  decision  in  accordance  with  the  provisions  of  section 
1063  of  the  Revised  Statutes,  but  before  the  case  reached  the  Court 


UNITED  STATES  V.  REALTY  COMPANY.  245 

of  Claims  the  present  cases  had  been  commenced  and  decided  in 
Louisiana. 

•          *•••••... 

In  the  view  we  take  of  these  cases  the  rights  of  the  parties  may 
be  passed  upon  and  actions  finally  decided  without  our  entering  upon 
a  discussion  as  to  the  validity  of  the  bounty  legislation  contained  in 
the  act  of  1890,  and  without  deciding  that  question.  For  the  pur- 
pose of  the  discussion  of  this  case  we  think  it  unnecessary  to  decide 
whether  or  not  such  legislation  is  beyond  the  power  of  Congress.  We 
are  of  opinion  that  in  either  case  the  appropriations  of  money  in  the 
act  of  1895  to  be  paid  to  certain  manufacturers  and  producers  of 
sugar  who  had  complied  with  the  act  of  1890  were  within  the  power 
of  Congress  to  make,  and  were  constitutional  and  valid. 

The  production  and  manufacture  of  sugar  in  the  Southern  and 
some  portions  of  the  Western  States  from  sugar  cane  and  from 
sorghum  and  beets  had  become  at  the  time  of  the  passage  of  the  act 
of  1890  an  industry  in  which  large  numbers  of  the  citizens  of  this 
country  were  engaged,  and  its  prosecution  involved  the  use  of  a 
very  large  amount  of  capital.  The  tariff  theretofore  had  been  very 
high  upon  imported  sugar,  and  the  native  industry  had  thereby  been 
encouraged,  fostered  and  greatly  increased.  The  subject  of  how  to 
treat  this  industry  was  under  discussion  in  Congress  while  the  tariff 
act  of  1890  was  before  it,  and  it  finally  decided  the  question  by 
enacting  the  bounty  clause  of  that  act.  Before  that  time  the  revenue 
on  imported  sugar  had  amounted  to  nearly  $60,000,000  in  one  year. 
To  put  sugar  on  the  free  list  would  reduce  the  revenue  that  amount, 
but  at  the  same  time  it  might,  as  was  urged  in  Congress  ruin  the 
persons  engaged  in  the  industry  in  this  country.  So  the  tariff  on 
sugar  was  reduced  while  at  the  same  time  a  bounty  was  placed  upon 
its  production  here  of  an  amount  which  it  was  thought  would  equal 
the  protection  the  industry  had  theretofore  enjoyed  under  the  tariff. 
The  act  was  approved  by  the  President  and  no  question  of  its  validity 
was  made  by  any  officer  of  the  government  having  any  duties  to  per- 
form under  it.  The  bounty  provision  was  by  the  terms  of  the  act 
to  remain  in  force  for  fifteen  years.  The  citizens  who  were  engaged 
in  the  manufacture  of  sugar  prepared  to  comply  with  the  provisions 
of  the  law  under  which  the  bounty  was  to  be  payable.  • 

Under  that  act  and  during  its  existence  large  sums  of  money  were 
paid  to  sugar  manufacturers  as  a  bounty,  and  all  manufacturers  con- 
tinued to  manufacture  in  reliance  upon  its  provisions.  During  these 
years  no  officer  of  the  government  questioned  the  validity  of  the  act. 


24G  PURPOSES  FOR  WHICH  TAXES  LAID. 

and  the  bounties  earned  under  it  were  paid  without  objection  or  any 
hint  that  objection  would  thereafter  be  taken  while  the  law  was  in 
force.  This  condition  continued  for  about  three  years.  In  the  win- 
ter, spring  and  summer  of  1894  it  is  matter  of  history  that  the  dis- 
cussion of  the  tariff  act,  which  finally  became  a  law  on  the  28th  of 
August  of  that  year,  was  continually  going  on  in  Congress  and 
through  the  public  prints  of  the  country.  Before  the  passage  of  the 
act  it  was,  of  course,  wholly  uncertain  as  to  what  its  provisions  would 
be,  including  the  question  of  the  bounty  for  the  manufacture  of  sugar. 
No  man  could  predict  it.  No  one  could  have  stated  whether  the 
bounty  would  be  taken  off  entirely  or  materially  reduced,  or  left  as 
it  stood  by'  the  act  of  1890.  The  whole  question  of  tariff  legislation 
at  that  time  was  full  of  uncertainty.  In  the  meantime  the  season 
was  approaching  when  the  manufacturer  of  sugar  must  decide  what 
to  do.  He  was  confronted  with  the  fact  that  the  act  of  1890  was 
still  in  existence,  and  under  its  provisions  he  must,  if  he  meant  to 
avail  himself  of  the  bounties  which  might  be  payable  under  the  act, 
make  his  application  for  and  obtain  a  license  prior  to  July  1  of  that 

year At  the  same  time,  if  he  made  application  and 

obtained  his  license  and  commenced  the  manufacture  of  sugar  under 
the  provisions  of  the  act  of  1890,  he  could  not  be  certain  that  the 
act  of  Congress  might  not  strike  out  altogether  the  provision  for  the 
payment  of  any  bounty  and  he  be  left  in  such  a  condition  that  he 
could  neither  manufacture  with  profit  nor  abstain  from  manufactur- 
ing without  loss.  All  this  by  no  fault  of  his;  doing  his  very  best, 
exerting  his  every  energy,  sleeplessly  vigilant  at  all  points,  it  wa* 
yet  impossible  for  him  to  decide  what  to  do  in  this  state  of  uncer- 
tainty, or  even  to  guess  which  would  be  the  road  least  liable  to  lead 
to  great  pecuniary  loss,  if  not  to  ruin.  Already  embarked  in  the 
business  and  in  this  state  of  uncertainty,  the  manufacturer  finally 
concludes  to  go  on  as  if  the  act  were  to  remain  in  existence,  feeling 
probably  a  firm  reliance  that  the  government  would  not  treat  its  citi- 
zens unjustly  or  unfairly  by  a  sudden  repeal  of  the  bounty  law  with- 
out making  such  temporary  provision  of  another  nature  by  which 
justice  would  be  done  him.  He  applied  for  a  license  and  commenced 
his  preparations,  as  the  then  existing  act  of  1890  provided  that  he 
might  do.  Making  his  arrangements  for  the  prospective  year  and 
preparing  for  the  manufacture  of  sugar  during  that  time,  the  manu- 
facturer is,  subsequently,  confronted  by  the  act  of  Congress  taking 
effect  August  28,  1894,  totally  repealing  the  provisions  of  the  act  of 
1890  upon  the  subject  of  bounties  and  prohibiting  from  that  time 
the  payment  thereof.  This  was  the  position  of  the  plaintiff,  Mr.  Gay, 


UNITED  STATES  V.   REALTY  COMPANY.  24? 

and  of  large  numbers  of  other  people.  The  Realty  Company  occu- 
pied a  still  more  unfortunate  position.  That  company  had  manu- 
factured sugar  between  the  first  of  July,  1893,  and  the  first  of  July, 
1894,  during  the  whole  of  which  period  the  act  of  1890  was  in  full 
force  and  after  July  1st,  1894,  the  company  obtained  the  warrants, 
duly  certified  and  authenticated  by  the  local  government  officers  in 
Louisiana,  for  the  payment  of  its  claim  to  bounty,  but  before  actual 
payment  'from  the  Treasury  of  the  United  States  could  be  obtained 
the  act  of  1894  came  into  existence,  with  its  provision  directing  that 
no  further  payment  of  bounty  should  thereafter  be  made.  Of  course, 
under  the  circumstances,  as  set  forth  in  regard  to  the  plaintiffs  in 
the  above  suits,  there  can  be  and  is  no  question  made  as  to  the  entire 
good  faith  of  all  parties,  and  the  question  presented  to  this  court  is 
one  of  constitutional  power  simply. 

This  condition  of  affairs  confronted  the  Congress  which  passed  the 
appropriation  in  question.  It  is  now  argued  by  counsel  for  the  gov- 
ernment that  Congress  had  no  valid  power  to  recognize  these  claims 
against  the  United  States  made  by  the  sugar  manufacturers,  because 
the  provision  in  regard  to  the  payment  of  bounties  contained  in  the 
act  of  1890  is  unconstitutional. 

Upon  this  assumption  it  is  said  that  no  claim,  legal,  moral,  equita- 
ble or  honorable  can  be  created  in  favor  of  the  sugar  manufacturer 
and  against  the  government,  and  that  where  there  is  neither  legal, 
moral  nor  honorable  obligation  to  pay,  Congress  has  no  power  to 
appropriate  money. 

We  are  of  opinion  that  the  parties,  situated  as  were  the  plaintiffs 
in  these  actions,  acquired  claims  upon  the  government  of  an  equita- 
ble, moral  or  honorary  nature.  Could  Congress  legally  recognize  and 
pay  them  although  the  act  of  1890  as  to  its  bounty  provisions  might 
be  unconstitutional?  It  is  true  that  in  general  an  unconstitutional 
act  of  Congress  is  the  same  as  if  there  were  no  act.  That  is  regard- 
ing it  in  its  pureh"  legal  aspect.  Being  in  violation  of  the  Constitu- 
tion, that  instrument  must  govern,  and  no  one  can  base  any  legal 
claim  as  arising  out  of  such  an  act.  That  is  a  very  different  princi- 
ple, however,  from  that  which  we  think  governs  in  this  case.  The 
persons  for  whose  benefit  the  appropriation  contained  in  the  act  of 
1895  was  made  are  not,  in  the  view  we  take,  asserting  the  existence 
of  a  legal  and  valid  debt  against  the  United  States  which  is  at  the 
same  time  based  upon  an  unconstitutional  act  of  Congress.  No  such 
inconsistent  and  illogical  position  is  taken.  They  are  asserting  that 
by  reason  of  the  occurrences  which  took  place  before  the  appropria- 


248  PURPOSES  FOR  WHICH  TAXES  LAID. 

tion,  among  which  was  the  passage  of  the  act  of  1890,  they  were  so 
placed  before  Congress  as  to  authorize  that  body  to  recognize  the 
equities  of  the  situation,  and  to  pay  their  claims  which,  while  they 
were  not  of  a  legal  character,  were  nevertheless  of  so  meritorious  and 
equitable  a  nature  as  to  authorize  the  nation  through  its  Congress  to 
appropriate  money  to  pay  them. 

There  was  enough  in  the  case  as  presented  to  Congress  upon  which 
to  base  the  assertion  that  there  was  a  moral  and  honorable  claim 
upon  the  public  treasury  which  that  body  had  the  constitutional  right 
to  recognize  and  pay. 

Under  the  provisions  of  the  Constitution,  (article  1,  section  8) 
Congress  has  power  to  lay  and  collect  taxes,  etc.,  "to  pay  the  debts 
of  the  United  States."  Having  power  to  raise  money  for  that  pur- 
pose, it  of  course  follows  that  it  has  power  when  the  money  is  raised 
to  appropriate  it  to  the  same  object.  What  are  the  debts  of  the 
United  States  within  the  meaning  of  this  constitutional  provision? 
It  is  conceded  and  indeed  it  cannot  be  questioned  that  the  debts  are 
not  limited  to  those  which  are  evidenced  by  some  written  obligation, 
or  to  those  which  are  otherwise  of  a  strictly  legal  character.  The 
term  "debt"  includes  those  debts  or  claims  which  rest  upon  a  merely 
equitable  or  honorary  obligation,  and  which  would  not  be  recovered 
in  a  court  of  law  if  existing  against  an  individual.  The  nation, 
speaking  broadly,  owes  a  "debt"  to  an  individual  when  his  claim 
grows  out  of  general  principles  of  right  and  justice;  when,  in  other 
words,  it  is  based  upon  considerations  of  a  moral  or  merely  hon- 
orary nature,  such  as  are  binding  on  the  conscience  or  the  honor  of 
an  individual,  although  the  debt  could  obtain  no  recognition  in  a 
court  of  law.  The  power  of  Congress  extends  at  least  as  far  as  the 
recognition  and  payment  of  claims  against  the  government  which 
are  thus  founded.  To  no  other  branch  of  the  government  than  Con- 
gress could  any  application  be  successfully  made  on  the  part  of  the 
owners  of  such  claims  or  debts  for  the  payment  thereof.  Their  recog- 
nition depends  solely  upon  Congress,  and  whether  it  will  recognize 
claims  thus  founded  must  be  left  to  the  discretion  of  that  body. 
Payments  to  individuals,  not  of  right  or  of  a  merely  legal  claim,  but 
payments  in  the  nature  of  a  gratuity,  yet  having  some  feature  of 
moral  obligation  to  support  them,  have  been  made  by  the  govern- 
ment by  virtue  of  the  acts  of  Congress,  appropriating  the  public 
money,  ever  since  its  foundation.  Some  of  the  acts  were  based  upon 
considerations  of  pure  charity.  A  long  list  of  acts  directing  pay- 
ments of  the  above  general  character  is  appended  to  the  brief  of  one 


UNITED  STATES  V.  REALTY  COMPANY.  240 

of  the  counsel  for  the  defendants  in  error.  The  acts  are  referred  to 
not  for  the  purpose  of  asserting  their  validity  in  all  cases,  but  a~ 
evidence  of  what  has  been  the  practice  of  Congress  since  the  adop- 
tion of  the  Constitution.  See,  also,  among  other  cases  in  this  court, 
Emerson  v.  Hall  13  Pet.  409;  United  States  \.  Price,  116  U.  S. 
43;  Williams  v.  Heard,  140  U.  S.  529.  The  last  cited  case  arose 
under  an  act  of  Congress  in  relation  to  the  Alabama  claims. 

The  power  to  provide  for  claims  upon  the  State  founded  in  equity 
and  justice  has  also  been  recognized  as  existing  in  the  state  govern- 
ments. For  example,  in  Guilford  v.  Chenango  County,  13  N.  Y. 
143,  it  was  held  by  the  New  York  court  of  appeals  that  the  legis- 
lature was  not  confined  in  its  appropriation  of  public  moneys  to  sums 
to  be  raised  by  taxation  in  favor  of  individuals  to  cases  in  which 
legal  demands  existed  against  the  State,  but  that  it  could  recognize 
claims  founded  in  equity  and  justice  in  the  largest  sense  of  these 
terms  or  in  gratitude  or  in  charity. 

Of  course,  the  difference  between  the  powers  of  the  State  legis- 
latures and  that  of  the  Congress  of  the  United  States  is  not  lost  sight 
of,  but  it  is  believed  that  in  relation  to  the  power  to  recognize  and 
to  pay  obligations  resting  only  upon  moral  considerations  or  upon 
the  general  principles  of  right  and  justice,  the  Federal  Congress 
stands  upon  a  level  with  the  state  legislature. 

In  truth,  the  general  proposition  that  Congress  can  direct  the  pay- 
ment of  debts  which  have  only  a  strong  moral  and  honorable  obliga- 
tion for  their  support  is  not,  as  we  understand  it,  denied  by  the 
learned  counsel  for  the  United  States;  but  it  is  claimed  that  in  these 
cases  no  foundation  whatever  is  laid  for  its  application,  because  the 
claims  arise  out  of  the  unconstitutional  provisions  of  the  act  giving 
bounties  in  1890.  It  is  impossible,  it  is  said,  to  build  even  an  equity 
Mit  of  an  act  of  Congress  which  is  utterly  void;  that  as  the  original 
act  offering  and  paying  bounties  was  void,  it  cannot  become  legal  to 
pay  them  because  of  any  alleged  equities  of  those  who  would  suffer 
from  their  sudden  discontinuance  as  set  forth  in  these  cases.  For 
the  reasons  already  given  we  do  not  think,  under  the  -circumstances 
surrounding  these  cases,  that  the  validity  of  the  act  of  1895,  can  be 
questioned  successfully. 

In  regard  to  the  question  whether  the  facts  existing  in  any  given 
case  bring  it  within  the  description  of  that  class  of  claims  which 
Congress  can  and  ought  to  recognize  as  founded  upon  equitable  and 
moral  considerations  and  grounded  upon  principles  of  right  and 
justice,  we  think  that  generally  such  question  must  in  its  nature  be 


250  PURPOSES  FOR  WHICH  TAXES  LAID. 

one  for  Congress  to  decide  for  itself.  Its  decision  recognizing  such 
a  claim  and  appropriating  money  for  its  payment  can  rarely,  if  ever, 
be  the  subject  for  review  by  the  judicial  branch  of  the  government. 
Upon  the  general  principle,  therefore,  that  the  government  of  the 
United  States,  through  Congress,  has  the  right  to  pay  the  debts  of 
the  United  States,  and  that  the  claims  in  these  cases  are  of  a  nature 
which  that  body  might  rightfully  decide  to  constitute  a  debt  payable 
to  the  United  States  upon  considerations  of  justice  and  honor,  we 
think  the  act  of  Congress  making  appropriations  for  the  payment  of 
such  claims  was  valid  without  reference  to  the  question  of  the  valid- 
ity or  invalidity  of  the  original  act  providing  for  the  payment  of 
bounties  to  manufacturers  of  sugar,  as  contained  in  the  tariff  act  of 
1890.  The  judgments  in  these  cases  are  right,  irrespective  of  how 
that  question  might  be  decided,  or  of  any  conclusion  that  might  be 
reached  upon  other  questions  suggested  at  the  bar. 

The  judgments  are,  therefore, 

Affirmed. 

Mr.  Justice  WHITE  did  not  sit  in  nor  take  any  part  in  the  decision 
of  these  cases. 


CHAPTER  V. 

THE  PURPOSE  MUST  PERTAIN  TO  THE  DISTRICT 

TAXED. 

I.     DISCRETION  OF  THE  LEGISLATURE. 

GORDON,  APPELLAXT,  VS.  CORNES  ET  AL.  RESPOND- 
ENTS. 

Court  of  Appeals  of  New  York.    March,  1872. 
47  New  York  608. 

Appeals  from  judgments  of  the  General  Term  of  the  supreme 
court  in  the  seventh  judicial  district,  affirming  judgments  for  de- 
fendants entered  upon  reports  of  a  referee. 

The  actions  were  in  trespass  for  taking  certain  personal  property 
of  plaintiffs,  who  were  taxpayers  and  residents  in  the  village  of 
Brockport,  Monroe  county.  Defendant,  Williams  was  the  tax  col- 
lector, and  the  other  defendants  were  trustees  of  said  village. 

RAPALLO,  J.  The  appellants  in  these  actions  claim  that  the  act 
of  the  legislature  authorizing  the  tax  for  the  collection  of  which  their 
property  was  levied  upon,  was  unconstitutional,  and  that,  therefore, 
the  trustees  who  issued  the  warrant,  and  the  collector  who  attempted 
to  execute  it  were  guilty  of  a  trespass. 

The  act  in  question  was  passed  March  19,  1867  (Laws  of  1867, 
chap.  96),  and  empowered  the  trustees  of  the  village  of  Brockport  to 
raise  the  money  necessary  to  carry  into  effect  certain  proposals  which 
they  had  made  pursuant  to  chapter  466  of  the  Laws  of  1866,  for  the 
establishment  of  a  normal  and  training  school  in  that  village,  which 
proposals  had  been  accepted,  and  to  that  end  to  levy  and  collect 
taxes  from  time  to  time,  as  they  might  deem  necessary,  but  not  ex- 
ceeding $50,000  in  the  aggregate. 

The  first  alleged  ground  of  objection  to  the  validity  of  this  act  is, 
that  the  institution  for  which  the  money  was  to  be  raised  was  not  a 
local  one,  but  was  for  the  equal  benefit  of  the  whole  State,  and  that 
the  assessment  ought  to  be  imposed  with  equality  upon  all  property 
within  the  State. 

There  can  be  no  doubt  of  the  correctness  of  the  general  proposi- 

251 


252  MUST  PERTAIN  TO  DISTRICT  TAXED. 

tion,  that  the  principle  upon  which  taxation  is  founded  is  that  the 
tax-payer  is  supposed  to  receive  just  compensation  in  the  benefits 
conferred  by  government,  and  in  the  proper  application  of  the  tax; 
and  that  in  the  exercise  of  the  taxing  power  the  legislature  ought, 
as  nearly  as  practicable,  to  apportion  the  tax  according  to  the  benefit 
which  each  tax-payer  is  supposed  to  receive  from  the  object  upon 
which  the  tax  is  expended. 

But  the  power  of  apportionment  is  included  in  the  power  to  im- 
pose taxes,  and  is  vested  in  the  legislature;  and  in  the  absence  of 
any  constitutional  restraint,  the  exercise  by  it  of  such  power  of  ap- 
portionment cannot  be  reviewed  by  the  courts.  (The  People  v.  The 
Mayor,  etc.,  4  Comst.  419.)  The  constitutions  of  some  of  our  sister 
States  contain  special  provisions  designed  to  guard  against  an  in- 
equitable exercise  of  this  power,  and  to  secure  equality  in  the  dis- 
tribution of  the  public  burdens.  A  violation  of  any  such  provisions 
would  undoubtedly  be  cognizable  by  the  courts.  But  in  this  State 
such  restraints  have  not  been  deemed  necessary,  and  the  people  have 
been  content  to  leave  to  the  wisdom  and  justice  of  the  legislature,  un- 
restrained by  specific  regulations,  the  subject  of  determining  how  the 
public  burdens  shall  be  apportioned  among  them.  (Prov.  Bank  v. 
Billings,  4  Peters  514,  561,  563;  4  Corns.  426,  427,  429;  Thomas  v. 
Leland,  24  Wend.  65 ;  Town  of  Guilford  v.  Supervisors  of  Chenango, 
13  N.  Y.  143-;  Bank  of  Rome  v.  Village  of  Rome,  18  N.  Y.  38; 
Brewster  v.  City  of  Syracuse,  19  N.  Y.  116.) 

To  undertake  to  review  the  action  of  the  legislature  in  this  respect, 
and  to  enforce  by  judicial  power,  absolute  equality  of  taxation,  or  to 
declare  a  law  unconstitutional  on  the  ground  that  the  locality  is 
taxed  for  what  might  seem  to  the  court  more  than  its  just  propor- 
tion for  an  expenditure  for  a  public  purpose,  would  be  an  usurpa- 
tion of  the  province  of  the  legislature.  (4  Comst.  426;  Darlington 
v.  The  Mayor,  31  N.  Y.  190.) 

It  would  be  going  too  far  to  deny  that  the  provisions  of  the  Con- 
stitution, which  declare  that  no  person  shall  be  deprived  of  property, 
without  due  process  of  law,  and  that  private  property  shall  not  be 
taken  for  public  use  without  just  compensation,  would  afford  protec- 
tion to  the  citizens  against  impositions  made  nominally  in  the  form 
of  taxes,  but  which  were  in  fact  forced  levies  upon  individuals  or 
confiscations  of  private  property;  as  for  instance,  if  the  general  ex- 
penses of  the  government  of  the  State,  or  of  one  of  its  municipal 
divisions,  should  be  levied  upon  the  property  of  an  individual  or  set 
of  individuals,  or  perhaps  upon  a  particular  district.  Cases  of  this 
description  might  be  imagined  in  which  an  act  would  fall  within  the 


GORDON  V.  CORNES  ET  AL.  ->53 

express  prohibitions  of  the  Constitution.  But  to  raise  the  constitu- 
tional question  would  require  an  extreme  case,  where  no  apportion- 
ment of  the  tax  with  reference  to  benefit  should  be  attempted,  and 
no  discretion  on  the  subject  exercised,  but  one  set  of  individuals  or 
one  district  should  be  confessedly  and  arbitrarily  required  to  pay  foi 
benefits  conferred  upon  others  who  bore  no  proportion  of  the  bur- 
den. No  such  question  arises  where  a  tax  is  imposed  upon  a  par- 
ticular locality  to  aid  in  a  public  purpose  which  the  legislature  may 
reasonably  regard  as  a  benefit  to  that  locality  as  well  as  to  the  State 
at  large.  When  the  legislature  has  proceeded  upon  the  ground  of 
such  mutual  benefits,  and  has  undertaken  to  make  the  apportion- 
ment, inequality  in  the  apportionment  of  the  expenses  of  the  under- 
taking, with  reference  to  the  benefits  resulting  respectively  to  the 
State  and  to  the  locality,  cannot  be  alleged  for  the  purpose  of  im- 
pugning the  validity  of  the  act. 

The  normal  school  in  question  was  to  be  established  pursuant  to 
chapter  466  of  the  Laws  of  1866,  for  the  education  of  teachers  for 
the  common  schools.  The  village  was,  according  to  the  proposals 
made  by  the  trustees,  to  furnish  the  land  and  buildings  required, 
and  to  supply  furniture  to  the  school  to  a  specified  amount.  These 
were  to  be  conveyed  to  the  State  and  placed  under  the  control  and 
direction  of  its  officers,  and  the  school  was  to  be  managed  by  a  local 
board  appointed  by  the  superintendent  of  public  instruction.  The 
village,  however,  did  not  undertake  to  defray  any  part  of  the  expense 
of  conducting  or  maintaining  the  school  or  any  of  its  departments, 
and  the  act  plainly  implies  that  these  expenses  are  to  be  borne  by 
the  State.  No  provision  is  made  by  the  proposals  for  any  contribu- 
tion by  the  village  to  these  expenses,  nor  is  any  tax  authorized  for 
that  purpose  by  the  act  of  1867.  It  also  appears  that  it  was  a  part 
of  the  project  that  there  should  be  a  grammar  school  attached,  which 
was  to  be  free  to  all  children  of  proper  acquirements  living  in  the 
village.  By  the  act  of  1866  the  normal  scholars  were  to  be  selected 
under  the  direction  of  the  superintendent  of  public  instruction,  who 
was  to  provide  that  every  part  of  the  State  should  have  its  propor- 
tionate representation  according  to  population;  but  if  any  district 
should  not  be  fully  represented,  preference  was  to  be  given,  in  sup- 
plying the  deficiency  to  those  residing  in  the  village  where  the  school 
was  located. 

From  this  brief  summary  of  the  project,  it  is  apparent  that  the 
establishment  of  the  school  may  well  have  been  deemed  by  the  legis- 
lature a  benefit  to  the  locality,  as  well  as  to  the  State  at  large,  and 
the  furnishing  of  the  land,  buildings  and  furniture  by  the  village, 


254  MUST  PERTAIN  TO  DISTRICT  TAXED. 

may  have  been  considered  no  more  than  its  just  contribution  toward 
such  benefit.  We  cannot  say,  judicially,  that  the  establishment  of 
this  school  was  so  foreign  to  the  interests  of  the  inhabitants  of  the 
village  that  it  was  beyond  the  legislative  power  to  authorize  the  vil- 
lage to  contribute  toward  its  establishment.  (Bank  of  Rome  v.  The 
Village  of  Rome,  18  N.  Y.  43.)  Without  regard,  therefore,  to  the 
fact  that  the  school  was  established  on  the  application  of  the  trus- 
tees of  the  village,  and  to  the  question  raised  by  the  counsel  for  ap- 
pellant, that  none  but  the  tax-payers  themselves  could  give  a  valid 
consent  to  the  assumption  of  the  burden,  we  think  that  the  case  dis- 
closes no  want  of  power  in  the  legislature  to  direct  the  levy  of  the 
tax  authorized  by  the  act  of  1867. 

We  have  examined  the  cases  of  Morford  v.  Unger,  (8  Iowa  R. 
82) ;  Ryerson  v.  Utley,  (16  Mich.  269)  ;  and  Hammatt  v.  The  City 
of  Philadelphia,  (8  Am.  Law  Reg.  U.  S.,  411) ;  to  which  we  have 
been  referred  on  the  part  of  the  appellant.  The  case  of  Morford  v. 
Unger  follows  the  cases  of  Wells  v.  The  City  of  Weston,  (22  Miss. 
385) ;  Cheany  v.  Horsec,  (9  B.  Monroe  330) ;  and  City  of  Coving- 
ton  v.  Southgate,  (15  B.  Monroe  491),  which  holds  that  the  legis- 
lature cannot  authorize  a  municipal  corporation  to  tax,  for  its  own 
local  purposes,  land  lying  beyond  its  corporate  limits,  and  that  an 
act  extending  the  corporate  limits  so  as  to  embrace  agricultural  land 
at  a  distance,  not  needed  for  city  purposes,  but  only  for  the  purpose 
of  subjecting  it  to  taxation,  is  a  mere  pretext,  and  an  invasion  of 
private  property  under  color  of  the  power  of  taxation.  The  case  of 
Ryerson  v.  Utley  rests,  in  part  at  least,  upon  a  provision  of  the 
State  Constitution,  the  effect  of  which  is  to  take  from  the  legislature 
the  power  of  taxation  for  internal  improvements.  Hammatt  v.  The 
City  of  Philadelphia-  holds  an  act  unconstitutional  which  authorized 
an  assessment  on  lots  fronting  on  a  street  for  repaving  the  street, 
after  it  had  once  been  opened  and  paved,  on  the  ground  that  such 
repaving  was  for  the  benefit  of  the  general  public.  That  decision 
goes  farther  than  has  ever  been  attempted  in  this  State,  and  con- 
flicts with  the  general  course  of  adjudication  here  upon  similar  asr 
sessments.  We  find  nothing  in  any  of  these  cases  to  induce  us  to 
vary  our  conclusion  as  to  the  act  now  in  question. 

The  judgments  should  be  affirmed  with  costs. 
All  concur  except  CHURCH,  Ch.  J.,  not  voting. 

Judgment  Affirmed. 


THOMAS  V.  LELAND  ET  AL.  255 

THOMAS  V.  LELAND  ET  AL. 

Supreme  Court  of  New  York.    May,  1840. 
24   Wendell   65. 

COWEN,  J.  It  is  objected  by  the  counsel  for  the  plaintiff,  first, 
that  the  statute  of  1835  sought  to  take  the  plaintiff's  property  with- 
out his  consent,  and  appropriate  it  to  the  payment  of  a  private  debt 
due  from  others;  and  that  such  a  statute  is  unconstitutional  and 
void.  The  consequence  is  not  denied  by  the  counsel  for  the  defend- 
ants, who  insists  that  the  statute  is,  in  effect,  no  more  than  any  of 
our  ordinary  acts  imposing  local  taxes  for  local  improvements  of  a 
public  character,  such  as  highways  and  bridges.  The  object  of  the 
statute,  and  the  share  of  individual  or  public  concern  in  the  tax, 
may  be  collected  from  the  acts  mentioned  in  the  pleas,  and  more 
fully,  when  connected  with  the  bond  set  forth  in  the  replication  to 
the  second  plea  of  the  defendant  Mason.  Some  time  previous  to 
March,  1834,  the  canal  commissioners,  thinking  that  the  Chenango 
canal  then  in  progress  of  construction,  might  be  more  economically 
connected  with  the  great  western  canal  at  Whitesborough  than  at  the 
city  of  Utica,  had  fixed  on  the  former  place  for  its  termination. 
Then  came  the  act  of  March  24th,  1834,  authorizing  the  commission- 
ers, on  the  extraordinary  expense  of  a  termination  at  Utica  being 
provided  by  those  more  immediately  interested,  to  change  the  ter- 
mination to  the  latter  place.  Hereupon  several  individuals,  either 
from  public  spirit,  or  in  respect  to  their  own  profit,  joined  in  a 
bond  to  the  people,  conditioned  to  pay  into  the  treasury,  for  the  ben- 
efit of  the  canal  fund,  $38,615,  the  estimated  excess,  and  so  much* 
more  as  should  make  good  the  contracts  affected  by  the  change. 
Thereupon  the  contemplated  change  was  made.  Afterwards,  on  the 
llth  May,  1835,  the  legislature  deeming  the  debt  thus  contracted  by 
individuals,  unreasonably  partial  and  onerous,  passed  the  statute 
now  in  question,  the  object  of  which  was  to  levy  the  tax  on  the  own- 
ers of  real  estate  in  the  city  of  Utica.  The  general  purpose  of  rais-- 
ing  the  money  by  tax  was,  therefore,  to  construct  a  canal,'  a  public 
highway,  which  the  legislature  believed  would  be  a  benefit  to  the  city 
of  Utica  as  such;  and,  independently  of  the  bond,  the  case  is  the 
ordinary  one  of  local  taxation  to  make  or  improve  a  highway.  If 
such  an  act  be  otherwise  constitutional,  we  do  not  see  how  the  cir- 
cumstance that  a  bond  had  been  before  given  securing  the  same 
money,  can  detract  from  its  validity.  Should  an  individual  volun- 
teer to  secure  a  sum  of  money  in  itself  properly  leviable  by  way  of 
tax  on  a  town  or  county,  there  would  be  nothing  in  the  nature  of 


256  MUST  PERTAIN  TO  DISTRICT  TAXED. 

such  an  arrangement,  which  would  preclude  the  legislature  from  re- 
sorting, by  way  of  tax,  to  those  who  are  primarily,  and  more  justly 
liable.  Even  should  he  pay  the  money,  what  is  there  in  the  consti- 
tution to  preclude  his  being  reimbursed  by  a  tax? 

But,  secondly,  it  is  said  that,  if  the  act  had  in  view  the  construc- 
tion of  the  canal,  then  it  was  unconstitutional,  as  seeking  to  take 
private  property  for  public  use,  without  just  compensation,  or  any 
compensation.  To  sustain  this  argument,  it  must  be  denied  that  th" 
general  profit  of  the  community  to  which  we  belong  will  warrant  a 
tax  affecting  our  property.  One  answer  in  the  case  at  bar  is,  that 
the  improvement  in  question,  was,  in  itself,  a  compensation  to  the 
plaintiff.  Such,  at  any  rate,  was  the  theory  of  the  proceeding,  and 
we  must  intend  that  it  was  carried  out  in  practice.  Such  was  the 
view  taken  by  the  legislature;  and  they  must  be  left  to  judge  of  the 
compensation. 

But  the  argument  proves  quite  too  much.  It  would  go  to  cut  off 
entirely  many  acknowledged  powers  of  taxation;  such  as  that  which 
raises  money  to  relieve  the  poor,  or  establish  and  keep  on  foot  com- 
mon schools,  to  build  bridges,  or  work  the  highway.  It  confound^ 
two  distinct  legislative  powers;  a  simple  power  of  taxation,  with  the 
power  of  taking  private  property  for  public  use.  The  former  acts 
upon  communities  and  may  be  exerted  in  favor  of  any  object  which 
the  legislature  shall  deem  for  the  public  benefit.  A  tax  to  build  a 
lunatic  asylum,  may  be  mentioned  as  one  instance.  If  the  power  to 
impose  such  a  tax  were  to  be  rested  on  the  ground  of  individual 
pecuniary  benefit  to  each  one  who  should  be  called  on  to  contribute, 
it  is  quite  obvious  that  it  would  not  be  maintained  for  a  moment. 
Yet  who  would  doubt  that  such  might  be  imposed  on  a  local  com- 
munity, a  county,  or  even  a  town?  I  admit  that  this  power  of  tax- 
ation may  be  abused;  but  its  exercise  cannot  be  judicially  restrained 
so  long  as  it  is  referable  to  the  taxing  power.  The  only  check  lies  at 
present  in  that  power  being  usually  exerted  on  considerable  bodies 
of  men,  who  possess  a  control  in  a  greater  or  less  degree  over  its 
agents. 

Judgment  for  the  defendants. 

If  the  purpose  of  the  tax  is  one  for  which  the  legislature  may  constitu- 
tionally authorize  a  tax,  it  may  as  a  rule  oblige  a  local  corporation  to  levy 
the  tax.  See  Perkins  v.  Slack,  86  Pa.  St.  283 ;  Philadelphia  v.  Field,  58  Pa.  St. 
320;  Guilford  v.  Supervisors  13  N.  Y.  143;  but  see  People  v.  Detroit  28  Mich. 
228;  People  v.  Batchellor,  53  N.  Y.  138. 


ST.  LOUIS  V.  FERRY  COMPANY. 

2.    Jurisdiction  over  property. 
ST.  LOUIS  V.  FERRY  COMPANY. 

Supreme  Court  of  the  United  States.     December,  1870. 
11  Wallace 


Mr.  Justice  SWAYNE  delivered  the  opinion  of  the  court. 

The  plaintiff  in  error  instituted  five  suits  in  the  St.  Louis  Cir- 
cuit Court  for  the  recovery  of  taxes  alleged  to  be  due  from  the  ferry 
company  to  the  city.  Upon  the  petition  of  the  company  they  were 
removed  into  the  Circuit  Court  of  the  United  States  for  that  dis- 
trict. In  that  court,  by  the  consent  of  the  parties,  the  causes  were 
consolidated  and  thereafter  proceeded  to  trial  as  one  case.  The  coun- 
sel upon  both  sides  entered  into  a  written  stipulation  waiving  a  jury 
and  the  cause  was  submitted  to  the  court,  pursuant  to  the  act  of 
Congress  of  March  3d,  1865.  The  court  found  the  facts  specially, 
and  the  finding  is  a  part  of  the  record.  Judgment  was  given  for  the 
defendant.  The  city  excepted  and  has  brought  the  case  here  for 
review. 

The  controversy  relates  to  taxes  imposed  by  the  city  upon  the 
ferry-boats  of  the  defendants,  used  in  conveying  freight  and  passen- 
gers across  the  Mississippi  River  between  the  city  of  St.  Louis  and 
the  opposite  Illinois  shore. 

It  has  been  said  that  the  power  of  taxation  for  the  purposes  of 
the  commonwealth  is  a  part  of  all  governmental  sovereignty  and  is 
inseparable  from  it.  It  is  for  the  legislature  to  decide  what  persons 
and  property  shall  be  reached  by  the  exercise  of  this  function  and 
in  what  proportions  and  by  what  processes  and  instrumentalities 
taxes  shall  be  assessed  and  collected.  The  authority  extends  over  all 
persons  and  property  within  the  sphere  of  its  territorial  jurisdiction. 

Where  there  is  jurisdiction  neither  as  to  person  nor  property,  the 
imposition  of  a  tax  would  be  ultra  vires  and  void.  If  the  legislature 
of  a  State  should  enact  that  the  citizens  or  property  of  another  State 
or  country  should  be  taxed  in  the  same  manner  as  the  persons  and 
property  within  its  own  limits  and  subject  to  its  authority,  or  in  any 
other  manner  whatsoever,  such  a  law  would  be  as  much  a  nullity  as 
if  in  conflict  with  the  most  explicit  constitutional  inhibition.  Juris- 
diction is  as  necessary  to'  valid  legislative  as  to  valid  judicial  action. 
17 


258  MUST  PERTAIN  TO  DISTRICT  TAXED. 

In  the  eye  of  the  law  personal  property,  for  most  purposes,  has 
no  locality.  Mobilia  sequuntur  personam;  immobilia  situm.  Mobilia 
non  habent  sequelam.  In  a  qualified  sense  it  accompanies  the  owner 
wherever  he  goes,  and  he  may  deal  with  it  and  dispose  of  it  accord- 
ing to  the  law  of  his  domicile.  If  he  die  intestate,  that  law,  where- 
soever the  property  may  be  situate,  governs  its  disposal,  and  fixes 
the  rights  and  shares  of  the  several  distributees.  (Story's  Conflict 
of  Laws  §  379;  Broom's  Maxims,  501,  502;  In  re  Ervin,  1  Cromp- 
ton  &  Jervis  156.)  But  this  doctrine  is  not  allowed  to  stand  in  the 
way  of  the  taxing  power  in  the  locality  where  the  property  has  its 
actual  situs,  and  the  requisite  legislative  jurisdiction  exists.  Such 
property  is  undoubtedly  liable  to  taxation  there  in  all  respects  as  if 
the  proprietor  were  a  resident  of  the  same  locality.  (International 
Life  Ass.  Co.  v.  Corns.  28  Barbour  318;  Hoyt  v.  Corns.  23  Id.  228; 
Story's  Conflict  of  Laws,  550.)  The  personal  property  of  a  resident 
at  the  place  of  his  residence  is  liable  to  taxation,  although  he  has  no 
intention  to  become  domiciled  there.  (Finley  v.  Philadelphia  32  Pa. 
St.  381.)  Whether  the  personal  property  of  a  resident  of  one  State 
situate  in  another  can  be  taxed  in  the  former,  is  a  question  which 
in  this  case  we  are  not  called  upon  to  decide.  (Wilson  v.  The 
Mayor  4  E.  D.  Smith  675;  Hoyt  v.  The  Corns.  23  N.  Y.  228.) 

Upon  looking  into  the  enactments  under  which  the  taxes  in  ques- 
tion were  assessed,  it  is  obvious  that  their  purpose  was  not  to  tax  the 
property  through  the  proprietor,  but  to  tax  the  things  themselves 
by  reason  of  their  being  "within  the  city."  The  point  for  us  to  de- 
cide, therefore,  is,  whether  they  are  covered  by  the  legal  provisions 
under  which  the  taxes  were  imposed.  If  the  taxing  officer  acted 
without  authority  the  taxes  were  invalid,  and  the  city  is  not  entitled 
to  recover  in  this  action. 

The  boats  were  enrolled  at  the  city  of  St.  Louis,  but  that  throws 
no  light  upon  the  subject  of  our  inquiry.  The  act  of  1789,  section 
2,  and  the  act  of  1792,  section  3,  (1  Stat.  at  Large,  55  and  Ib.  287) 
require  every  vessel  to  be  registered  in  the  district  to  which  she  be- 
longs and  the  fourth  section  of  the  former  act,  and  the  third  section 
of  the  latter,  declares  that  her  home  port  shall  be  that  at  or  near 
which  her  owner  resides.  The  solution  of  the  question,  where  her 
home  port  is,  when  it  arises,  depends  wholly  upon  the  locality  of 
her  owner's  residence,  and  not  upon  the  place  of  her  enrollment.  (3 
Kent,  133,  170,  Hill  v.  The  Golden  Gate,  Newberry  308;  S.  B. 
Superior  Ib.  181;  Jordan  v.  Young  37  Me.  276.) 

The  court  found  that  the  boats,  "when  not  in  actual  use,  were 


LOAN  SOCIETY  V.  MULTNOMAH  CO.  259 

laid  up  by  the  Illinois  shore,,  and  were  forbidden,  by  a  general  ordi- 
nance of  the  city  of  St.  Louis  regulating  ferries  and  ferry-boats,  to 
remain  at  the  St.  Louis  wharf  or  landing  longer  than  ten  minutes 
at  a  time."  A  tax  was  paid  upon  the  boats  in  Illinois.  Their  rela- 
tion to  the  city  was  merely  that  of  contact  there,  as  one  of  the  ter- 
mini of  their  transit  across  the  river  in  the  prosecution  of  their  busi- 
ness. The  time  of  such  contact  .was  limited  by  the  city  ordinance. 
Ten  minutes  was  the  maximum  of  the  stay  they  were  permitted  to 
make  at  any  one  time.  The  owner  was,  in  the  eye  of  the  law,  a  citi- 
zen of  that  State,  and  from  the  inherent  law  of  its  nature  could  not 
emigrate  or  become  a  citizen  elsewhere.  As  the  boats  were  laid  up 
on  the  Illinois  shore  when  not  in  use,  and  the  pilots  and  engineer? 
who  ran  them  lived  there,  that  locality,  under  the  circumstances  must 
be  taken  to  be  their  home  port.  They  did  not  so  abide  within  tht: 
city  as  to  become  incorporated  with  and  form  a  part  of  its  personal 
property.  (Hays  v.  Pac.  Steamship  Co.  17  Howard  599;  City  of 
Albany  v.  Meekins  3  Ind.  481.)  Hence  they  were  beyond  the  juris- 
diction of  the  authorities  by  which  the  taxes  were  assessed,  and  the 
validity  of  the  taxes  cannot  be  maintained.  (Railroad  Co.  v.  Jack- 
son, 7  Wallace,  262.)  In  our  opinion  the  facts  found  are  sufficient 
to  support  the  judgment. 

Judgment  affirmed. 

See  also  Hays  v.   Pacific  Mail   Steamship  Co.   17  How.  596;  Morgan  v. 
Parham,  16  Wallace  477. 


SAVINGS  AND  LOAN  SOCIETY  V.  MULTNOMAH  COUNTY. 

Supreme  Court   of  the   United  States.     March,  1898. 
169  United  States,  421. 

Mr.  Justice  GRAY  delivered  the  opinion  of  the  court. 
•  This  was  a  bill  in  equity  filed  in  the  Circuit  Court  of  the  United 
States  for  the  District  of  Oregon,  by  the  Savings  and  Loan  Society, 
a  corporation  and  citizen  of  the  State  of  California,  against  Multno- 
mah  County,  a  public  corporation  in  the  State  of  Oregon,  and  one 
Kelly,  the  sheriff  and  ex  officio  the  tax  collector  of  that  county,  and 
a  citizen  of  that  State,  showing  that  in  1891  and  1892  various  per- 
sons, all  citizens  of  Oregon,  severally  made  their  promissory  notes  to 
secure  the  payment  of  various  sums  of  money,  with  interest,  to  the 


260  MUST  PERTAIN  TO  DISTRICT  TAXED. 

plaintiff  at  its  office  in  the  City  of  San  Francisco  and  State  of  Cali- 
fornia, amounting  in  all  to  the  sum  of  $531,000;  and,  to  further 
secure  the  same  debts,  executed  to  the  plaintiff  mortgages  of  divers 
parcels  of  land  owned  by  them  in  Multnomah  County ;  that  the  mort- 
gages were  duly  recorded  in  the  office  of  the  recorder  of  conveyances 
of  that  county;  that  the  notes  and  mortgages  were  immediately  de- 
livered to  the  plaintiff,  and  had  ever  since  been  without  the  State 
of  Oregon,  and  in  the  possession  of  the  plaintiff  at  San  Francisco: 
that  afterwards,  in  accordance  with  the  statute  of  Oregon  of  October 
26,  1882,  taxes  were  imposed  upon  all  the  taxable  property  in  Mult- 
nomah county,  including  the  debts  and  mortgages  aforesaid;  that, 
the  taxes  upon  these  debts  and  mortgages  not  having  been  paid,  a 
list  thereof  was  placed  in  the  hands  of  the  sheriff,  with  a  warrant 
directing  him  to  collect  the  same  as  upon  execution,  and  he  adver- 
tised for  sale  all  the  debts  and  mortgages  aforesaid;  and  that  the 
statute  was  in  violation  of  the  Fourteenth  Amendment  of  the  Con- 
stitution of  the  United  States,  as  depriving  the  plaintiff  of  its  prop- 
erty without  due  process  of  law,  and  denying  to  it  the  equal  protec- 
tion of  the  laws.  The  bill  prayed  for  an  injunction  against  the  sale; 
and  for  a  decree  declaring  that  the  statute  was  contrary  to  the  pro- 
visions of  the  Constitution  of  the  United  States  and  therefore  of  no 
effect,  and  that  all  the  proceedings  before  set  out  were  null  and  void ; 
and  for  further  relief. 

The  defendants  demurred  generally;  and  the  court  sustained  the 
demurrer,  and  dismissed  the  bill.  60  Fed.  Rep.  31.  The  plaintiff 
appealed  to  this  court. 

The  ground  upon  which  the  plaintiff  seeks  to  maintain  this  suit 
is  that  the  tax  act  of  the  State  of  Oregon  of  1882,  as  applied  to  the 
mortgages,  owned  and  held  by  the  plaintiff  in  California,  of  lands 
in  Oregon,  is  contrary  to  the  Fourteenth  Amendment  of  the  Consti- 
tution of  the  United  States,  as  depriving  the  plaintiff  of  its  prop- 
erty without  due  process  of  law,  and  denying  to  it  the  equal  protec- 
tion of  the  laws. 

The  statute  in  question  makes  the  following  provisions  for  the  tax- 
ation of  mortgages:  By  §  1,  "a  mortgage,  deed  of  trust,  contract 
or  other  obligation  whereby  land  or  real  property,  situated  in  no 
more  than  one  county  in  this  State,  is  made  security  for  the  pay- 
ment of  a  debt,  together  with  such  debt,  shall,  for  the  purposes  of 
assessment  and  taxation,  be  deemed  and  treated  as  land  or  real  prop- 
erty/' By  §  2,  the  mortgage,  "together  with  such  debt,  shall  be  as- 
sessed and  taxed  to  the  owner  of  such  security  and  debt  in  the 
county,  city  or  district  in  which  the  land  or  real  property  affected  by 


LOAN  SOCIETY  V.  MULTXOMAH  CO.  "  261 

such  security  is  situated;"  and  may  be  sold,  like  other  real  property, 
for  the  payment  of  taxes  due  thereon.  By  §  3,  that  person  is  to  be 
deemed  the  owner,  who  appears  to  be  such  on  the  record  of  the  mort- 
gage, either  as  the  original  mortgagee,  or  as  an  assignee  by  transfer 
made  in  writing  upon  the  margin  of  the  record.  By  §  4,  no  payment 
on  the  debt  so  secured  is  to  be  taken  into  consideration  in  assessing 
the  tax,  unless  likewise  stated  upon  the  record;  and  the  debt  and 
mortgage  are  to  be  assessed  for  the  full  amount  appearing  by  the 
record  to  be  owing,  unless  in  the  judgment  of  the  assessor  the  land 
is  not  worth  so  much,  in  which  case  they  are  to  be  assessed  at  their 
real  cash  value.  By  §§  5,  6,  7,  it  is  made  the  duty  of  each  county 
clerk  to  record,  in  the  margin  of  the  record  of  any  mortgage,  when 
requested  so  to  do  by  the  mortgagee  or  owner  of  the  mortgage,  all 
assignments  thereof  and  payments  thereon;  and  to  deliver  annually 
to  the  assessor  abstracts  containing  the  requisite  information  as  to 
unsatisfied  mortgages  recorded  in  his  office.  By  §  8,  a  debt  secured 
by  mortgage  of  land  in  a  county  of  this  State  "shall,  for  the  pur- 
pose of  taxation,  be  deemed  and  considered  as  indebtedness  within 
this  State,  and  the  person  or  persons  owing  such  debt  shall  be  en- 
titled to  deduct  the  same  from  his  or  their  assessments  in  the  same 
manner  that  other  indebtedness  within  the  State  is  deducted." 

The  statute  applies  only  to  mortgages  of  land  in  not  more  than 

one  county The  mortgages  now  in  question  were  all 

made  since  the  statute,  and  were  of  land  in  a  single  county ;  and 
it  is  not  suggested  in  the  bill  that  there  existed  any  untaxed  mort- 
gage of  lands  in  more  than  one  county. 

The  statute,  in  terms,  provides  that  "no  promissory  note  or  other 
instrument  in  writing,  which  is  the  evidence  of"  the  debt  secured  by 
the  mortgage,  "shall  be  taxed  for  any  purpose  within  this  State;'* 
but  that  the  debt  and  mortgage  "shall,  for  the  purposes  of  assess- 
ment and  taxation,  be  deemed  and  treated  as  land  or  real  property" 
in  the  county  in  which  the  land  is  situated,  and  be  there  taxed,  not 
beyond  their  real  cash  value,  to  the  person  appearing  of  record  to 
be  the  owner  of  the  mortgage. 

The  statute  authorizes  the  amount  of  the  mortgage  debt  to  be  de* 
ducted  from  any  assessment  upon  the  mortgagor;  and  does  not  pro- 
vide for  both  taxing  to  the  mortgagee  the  money  secured  by  the 
mortgage,  and  also  taxing  to  the  mortgagor  the  whole  mortgaged 
property,  as  did  the  statutes  of  other  States,  the  validity  of  which 
was  affirmed  in  Augusta  Bank  v.  Augusta,  36  Maine,  255,  259 ;  Ala- 


262  MUST  PERTAIN  TO  DISTRICT  TAXED. 

bama  Ins.  Co.  v.  Lott,  54  Alabama,  499 ;  Appeal  Tax  Court  v.  Rice, 
50  Maryland,  302;  and  Goldgart  v.  People,  106  Illinois,  25. 

The  right  to  deduct  from  his  assessment  any  debts  due  from  him 
within  the  State  is  secured  as  well  to  the  mortgagee,  as  to  the  mort- 
gagor, by  a  provision  of  the  statute  of  Oregon  of  October  25,  1880, 
(unrepealed  by  the  statute  of  1882,  and  evidently  assumed  by  §  8 
of  this  statute  to  be  in  force),  by  which  "it  shall  be  the  duty  of  the 
assessor,  to  deduct  the  amount  of  indebtedness,  within  the  State,  of 
any  person  assessed,  from  the  amount  of  his  or  her  taxable  property." 
Oregon  Laws  of  1880,  p.  52 ;  Hill's  Code,  §  2752. 

Taking  all  the  provisions  of  the  statute  into  consideration,  its 
clear  intent  and  effect  are  as  follows:  The  personal  obligation  of 
the  mortgagor  to  the  mortgagee  is  not  taxed  at  all.  The  mortgage 
and  the  debt  secured  thereby  are  taxed,  as  real  estate,  to  the  mort- 
gagee, not  beyond  their  real  cash  value  and  only  so  far  as  they  rep- 
resent an  interest  in  the  real  estate  mortgaged.  The  debt  is  not 
taxed  separately,  but  only  together  with  the  mortgage;  and  is  con- 
sidered as  indebtedness  within  the  State  for  no  other  purpose  than 
to  enable  the  mortgagor  to  deduct  the  amount  thereof  from  the  as- 
sessment upon  him,  in  the  same  manner  as  other  indebtedness  within 
the  State  is  deducted.  And  the  mortgagee,  as  well  as  the  mort- 
gagor, is  entitled  to  have  deducted  from  his  assessment  the  amount 
of  his  indebtedness  within  the  State. 

The  result  is  that  nothing  is  taxed  but  the  real  estate  mortgaged, 
the  interest  of  the  mortgagee  therein  being  taxed  to  him,  and  the 
rest  to  the  mortgagor.  There  is  no  double  taxation.  Nor  is  any 
such  discrimination  made  between  mortgagors  and  mortgagees,  or 
between  resident  and  non-resident  mortgagees,  as  to  deny  to  the 
latter  the  equal  protection  of  the  laws. 

The  case,  then,  reduces  itself  to  the  question  whether  this  tax  act, 
as  applied  to  mortgages  owned  by  citizens  of  other  States  and  their 
possession  outside  of  the  State  of  Oregon,  deprives  them  of  their 
property  without  due  process  of  law. 

By  the  law  of  Oregon,  indeed,  as  of  some  other  States  of  the 
Union,  a  mortgage  of  real  property  does  not  convey  the  legal  title 
to  the  mortgagee,  but  creates  only  a  lien  or  incumbrance  as  security 
for  the  mortgage  debt;  and  the  right  of  possession,  as  well  as  the 
legal  title,  remains  in  the  mortgagor,  both  before  and  after  condition 
broken,  until  foreclosure.  Oregon  General  Laws  of  1843-1872,  §  323 ; 
Hill's  Code,  §  326;  Anderson  v.  Baxter,  4  Oregon  105,  110;  Sem- 
ple  v.  Bank  of  British  Columbia,  5  Sawyer  88,  394;  Teal  v.  Walker, 


LOAN  SOCIETY  V.  MULTNOMAH  CO.  2ii3 

111  U.  S.  242;  Sellwood  v.  Gray,  11  Oregon  534;  Watson  v.  Dun- 
dee Mortgage  Co.,  12  Oregon  474 ;  Thompson  v.  Marshall,  21  Oregon 
171;  Adat'r  v.  Adair,  22  Oregon  115. 

Notwithstanding  this,  it  has  been  held,  both  by  the  Supreme 
Court  of  the  State,  and  by  the  Circuit  Court  of  the  United  States 
for  the  District  of  Oregon,  that  the  State  has  the  power  to  tax  mort- 
gages, though  owned  and  held  by  citizens  and  residents  of  other 
States,  of  lands  in  Oregon.  Mumford  v.  Sew  ell,  11  Oregon  67; 
Dundee  Mortgage  Co.  v.  School  District,  10  Sawyer  52;  Crawford 
v.  Linn  County,  11  Oregon  482;  Dundee  Mortgage  Co.  v.  Parrish, 
11  Sawyer  92;  Poppleton  v.  Yamhill  County,  18  Oregon  377,  383; 
Savings  &  Loan  Society  v.  Multnomah  County,  60  Fed.  31. 

The  authority  of  every  State  to  tax  all  property,  real  and  per- 
sonal, within  its  jurisdiction,  is  unquestionable.  McCulloch  v.  Mary- 
land, 4  Wheat.  316,  429.  Personal  property,  as  this  court  has  de- 
clared again  and  again,  may  be  taxed,  either  at  the  domicil  of  its 
owner,  or  at  the  place  where  the  property  is  situated,  even  if  the 
owner  is  neither  a  citizen  nor  a  resident  of  the  State  which  imposes 
the  tax.  Tappan  v.  Merchants'  Bank,  19  Wall.  490,  499;  State 
Railroad  Tax  cases,  92  U.  S.  575,  607;  Coe  v.  Errol,  116  U.  S.  517, 
524;  Pullmans  Car  Co.  v.  Pennsylvania,  141  U.  S.  18,  22,  27.  The 
State  may  tax  real  estate  mortgaged,  as  it  may  all  other  property 
within  its  jurisdiction,  at  its  full  value.  It  may  do  this,  either  by 
taxing  the  whole  to  the  mortgagor,  or  by  taxing  to  the  mortgagee 
the  interest  therein  represented  by  the  mortgage,  and  to  the  mort- 
gagor the  remaining  interest  in  the  land.  And  it  may,  for  the  pur- 
poses of  taxation,  either  treat  the  mortgage  debt  as  personal  prop- 
erty, to  be  taxed,  like  other  choses  in  action,  to  the  creditor  at  his 
domicil;  or  treat  the  mortgagee's  interest  in  the  land  as  real  estate, 
to  be  taxed  to  him,  like  other  real  property,  at  its  situs.  Firemen's 
Ins.  Co.  v.  Commonwealth,  137  Mass.  80,  81;  State  v.  Runyon,  12 
Vroom,  (41  N.  J.  Law),  98,  105;  Darcy  v.  Darcy,  22  Vroom,  (51  N. 
J.  Law),  140,  145;  People  v.  Smith,  88  N.  Y.  576,  585;  Common 
Council  v.  Assessors,  91  Michigan  78,  92. 

The  plaintiff  much  relied  on  the  opinion  delivered  by  Mr.  Justice 
Field  in  Cleveland,  Painesville  &  Ashtabula  Railroad  v.  Pennsyl- 
vania, reported  under  the  name  of  Case  of  the  State  Tax  on  For- 
eign-Held Bonds,  15  Wall.  300,  323.  It  becomes  important  there- 
fore to  notice  exactly  what  was  there  decided.  In  that  case,  a  rail- 
road company,  incorporated  both  in  Ohio  and  in  Pennsylvania,  had 
issued  bonds  secured  by  a  mortgage  of  its  entire  road  in  both 


264  MUST  PERTAIN  TO  DISTRICT  TAXED. 

States;  and  the  tax  imposed  by  the  State  of  Pennsylvania,  which 
was  held  by  a  majority  of  this  court  to  be  invalid,  was  a  tax  upon 
the  interest  due  to  the  bondholders  upon  the  bonds,  and  was  not  a 
tax  upon  the  railroad,  or  upon  the  mortgage  thereof,  or  upon  the 
bondholders  solely  by  reason  of  their  interest  in  that  mortgage.  The 
remarks  in  the  opinion,  supported  by  quotations  from  opinions  of  the 
Supreme  Court  of  Pennsylvania,  that  a  mortgage,  being  a  mere  se- 
curity for  the  debt,  confers  upon  the  holder  of  the  mortgage  no  in- 
terest in  the  land,  and  when  held  by  a  non-resident  is  as  much  be- 
yond the  jurisdiction  of  the  State  as  the  person  of  the  owner,  went 
beyond  what  was  required  for  the  decision  of  the  case,  and  cannot 
be  reconciled  with  other  decisions  of  this  court  and  of  the  Supreme 
Court  of  Pennsylvania. 

This  court  has  always  held  that  a  mortgage  of  real  estate,  made 
in  good  faith  by  a  debtor  to  secure  a  private  debt,  is  a  conveyance 
of  such  an  interest  in  the  land,  as  will  defeat  the  priority  given  to 
the  United  States  by  act  of  Congress  in  the  distribution  of  the 
debtor's  estate.  United  States  v.  Hooe,  3  Cranch  73;  Thelusson  v. 
Smith,  2  Wheat.  396,  426;  Conard  v.  Atlantic  Ins.  Co.,  1  Pet.  386, 
441. 

•  »•••••••• 

In  Kirtland  v.  HotchTciss,  42  Conn.  426,  affirmed  by  this  court  in 
100  U.  S.  491,  the  point  adjudged  was  that  debts  to  persons  residing 
,.  in  one  State,  secured  by  mortgage  of  land  in  another  State,  might, 
for  the  purposes  of  taxation,  be  regarded  as  situated  at  the  domicile 
^\  of  the  creditor.  But  the  question,  whether  the  mortgage  could  be 
"4-  taxed  there  only,  was  not  involved  in  the  case,  and  was  not  decided, 
either  by  the  Supreme  Court  of  Connecticut  or  by  this  court. 

In  many  other  cases  cited  by  the  appellant,  there  was  no  statute 
expressly  taxing  mortgages  at  the  situs  of  the  land;  and,  although 
the  opinions  in  some  of  them  took  a  wider  range,  the  only  question 
in  any  of  them  was  one  of  the  construction,  not  of  the  constitution- 
ality, of  a  statute — of  the  intention,  not  of  the  power  of  the  legis- 
lature. Such  were:  Davenport  v.  Mississippi  &  Missouri  Railroad, 
12  Iowa  539;  Latrobe  v.  Baltimore,  19  Maryland  13;  People  v. 
Eastman,  25  California  601;  State  v.  Earl,  I  Nevada  394;  Arapa- 
hoe  v.  Cutter,  3  Colorado  349;  People  v.  Smith,  88  N.  Y.  576; 
Grant  v.  Jones,  39  Ohio  St.  506 ;  State  v.  Smith,  68  Mississippi  79 ; 
Holland  v.  Silver  Bow  Commissioners,  15  Montana  460. 

The  statute  of  Oregon,  the  constitutionality  of  which  is  now 
drawn  in  question,  expressly  forbids  any  taxation  of  the  promissory 
note,  or  other  instrument  of  writing,  which  is  the  evidence  of  the 


NEW  ORLEANS  V.  STEMPEL.  265 

debt  secured  by  the  mortgage;  and,  with  equal  distinctness,'  pro- 
vides for  the  taxation,  as  real  estate,  of  the  mortgage  interest  in  the 
land.  Although  the  right  which  the  mortgage  transfers  in  the  land 
covered  thereby  is  not  the  legal  title,  but  only  an  equitable  interest 
and  by  way  of  security  for  the  debt,  it  appears  to  us  to  be  clear 
upon  principle,  and  in  accordance  with  the  weight  of  authority,  that 
this  interest,  like  any  other  interest  legal  or  equitable,  may  be  taxed 
to  its  owner  (whether  resident  or  non-resident)  in  the  State  where 
the  land  is  situated,  without  conkavening  any  provision  of  the  Con- 
stitution of  the  United  States. 

Decree  affirmed. 

Mr.  Justice  HARLAN  and  Mr.  Justice  WHITE  dissented. 

Mr.  Justice  McKENNA,  not  having  been  a  member  of  the  court 
when  this  case  was  argued,  took  no  part  in  the  decision. 


NEW  ORLEANS  V.  STEMPEL. 

Supreme  Court  of  the  United  States.     October,  1899. 
175  United  States  309. 

This  case  came  on  appeal  from  the  Circuit  Court  of  the  United 
States  for  the  Eastern  District  of  Louisiana.  It  is  a  suit  brought 
by  the  appellee  to  restrain  the  collection  of  taxes  levied  upon  certain 
personal  property  which  she  claims  was  exempt  from  taxation.  The 
important  facts  are  these:  The  plaintiff,  as  well  as  the  infants 
whose  guardian  she  is,  and  for  whose  benefit  she  brings  this  suit, 
are  residents  of  the  State  of  New  York,  in  which  State  she  has  been 
duly  appointed  the  guardian  of  their  estates.  The  infants  inherited 
certain  property  from  their  grandfather,  a  resident  of  Louisiana, 
whose  estate  was  duly  settled  in  the  proper  court  of  that  State.  By 
regular  proceedings  these  infants  had  been  adjudged  his  legal  heirs, 
and  she,  as  guardian,  had  been  put  in  possession  of  their  property 
thus  inherited.  The  order  of  the  court,  in  this  respect,  was  rend- 
ered February  14,  1896,  and  the  taxes  which  were  sought  to  be  re- 
strained were  those  of  that  year.  The  assessment,  as  appears  by  the 
assessment  roll,  was  in  the  name  of  "the  estate  of  D.  C.  McCan;" 
was  of  $15,000,  "money  in  possession,  on  deposit,  or  in  hand,"  and 
of  $800,000,  "money  loaned  on  interest,  all  credits  and  all  bills  re- 
ceivable, for  money  loaned  or  advanced,  or  for  goods  sold;  and  all 
credits  of  any  and  every  description."  The  principal  contentions  of 


266  MUST  PERTAIN  TO  DISTRICT  TAXED. 

the  plaintiff  were:  First,  that  included  within  this  personal  prop- 
erty was  some  $228,000  of  the  bonds  of  the  State  of  Louisiana,  tax- 
ation of  which  by  the  State  or  any  of  its  municipalities  was  void,  as 
impairing  the  obligation  of  a  contract  made  by  the  State.  Second, 
that  the  situs  of  the  loans  and  credits  was  in  New  York,  the  place 
of  residence  of  the  guardian  and  wards,  and,  therefore,  being  loans 
and  credits  without  the  State  of  Louisiana  they  were  not  subject  to 
taxation  therein. 

Mr.  Justice  BREWER,  after  making  the  above  statement,  delivered 
the  opinion  of  the  court. 

The  important  question  is  whether  the  property  was  subject  to  tax- 
ation. With  regard  to  the  contention  that  certain  bonds  were  in- 
cluded in  the  assessment  which  were  not  subject  to  taxation  on  ac- 
count of  the  supposed  contract  of  the  State  of  Louisiana,  it  is  suffi- 
cient to  say  that  the  assessment  does  not  purport  to  include  any 
bonds. 

Under  the  circumstances  disclosed  by  the  testimony,  were  the 
money  and  credits  subject  to  taxation?  It  appears  that  these  credits 
were  evidenced  by  notes  largely  secured  by  mortgages  on  real  estate 
in  New  Orleans;  that  these  notes  and  mortgages  were  in  the  city 
of  New  Orleans,  in  possession  of  an  agent  of  the  plaintiff,  who  col- 
lected the  interest  and  principal  as  it  became  due  and  deposited  the 
same  in  a  bank  in  New  Orleans  to  the  credit  of  the  plaintiff.  The 
question,  therefore,  is  distinctly  presented,  whether,  because  the  own- 
ers were  domiciled  in  the  State  of  New  York,  the  moneys  so  depos- 
ited in  a  bank  within  the  limits  of  the  State  of  Louisiana,  and  the 
notes  secured  by  mortgages  situated  and  held  as  above  described, 
were  free  from  taxation  in  the  latter  State.  Of  course,  there  must 
be  statutory  warrant  for  such  taxation,  for  if  the  legislature  omits 
any  property  from  the  list  of  taxables  the  courts  are  not  authorized 
to  correct  the  omissions  and  adjudge  the  omitted  property  to  be 
subject  to  taxation. 

From  this  review  of  the  decisions  of  the  Supreme  Court  of  the 
State  it  is  obvious  that  moneys,  such  as  those  referred  to,  collected 
as  principal  and  interest  of  notes,  mortgages  and  other  securities 
kept  within  the  State  and  deposited  in  one  of  the  banks  of  the  State 
for  use  or  reinvestment,  are  taxable  under  the  act  of  1890. 

When  the  question  is  whether  property  is  exempt  from  taxation, 


NEW  ORLEANS  V.  STEMPEL.  26? 

and  that  exemption  depends  alone  on  the  true  construction  of  a  stat- 
ute of  the  State,  the  Federal  courts  should  be  slow  to  declare  an  ex- 
emption in  advance  of  any  decision  by  the  courts  of  the  State.  The 
rule  in  such  a  case  is  that  the  Federal  courts  follow  the  construction 
placed  upon  the  statute  by  the  state  courts,  and  in  advance  of  such 
construction  they  should  not  declare  property  beyond  the  scope  of 
the  statute  and  exempt  from  taxation  unless  it  is  clear  that  such  is 
the  fact.  In  other  words,  they  should  not  release  any  property 
within  the  State  from  its  liability  to  state  taxation  unless  it  is  ob- 
vious that  the  statutes  of  the  State  warrant  such  exemption,  or  un- 
less the  mandates  of  the  Federal  Constitution  compel  it. 

If  we  look  to  the  decisions  of  the  other  States  we  find  the  fre- 
quent ruling  that  when  an  indebtedness  has  taken  a  concrete  form 
and  become  evidenced  by  note,  bill,  mortgage  or  other  written  in- 
strument, and  that  written  instrument  evidencing  the  indebtedness 
is  left  within  the  State  in  the  hands  of  an  agent  of  the  non-resident 
owner,  to  be  by  him  used  for  the  purposes  of  collection  and  deposit 
or  reinvestment  within  the  State,  its  taxable  situs  is  in  the  State. 
See  Catlin  v.  Hull,  21  Vermont  152,  in  which  the  rule  was  thus  an- 
nounced (pages  159,  161) : 

With  reference  to  the  decisions  of  this  court  it  may  be  said  that 
there  has  never  been  any  denial  of  the  power  of  a  State  to  tax  securi- 
ties situated  as  these  are,  while  there  have  been  frequent  recogni- 
tions of  its  power  to  separate  for  purposes  of  taxation  the  situs  of 
personal  property  from  the  domicil  of  the  owner. 

This  matter  of  situs  may  be  regarded  in  another  aspect.  In  the 
absence  of  statute,  bills  and  notes  are  treated  as  choses  in  action  and 
are  not  subject  to  levy  and  sale  on  execution,  but  by  the  statutes  of 
many  States,  they  are  made  so  subject  to  seizure  and  sale,  as  any 
tangible  personal  property.  I  Freeman  on  Executions,  sec.  112;  4 
Am.  &  Eng.  E.  of  L.,  2d  ed.  282;  11  Am.  &  Eng.  E.  of  L.,  2d  ed. 
623.  Among  the  States  referred  to  in  these  authorities  as  having 
statutes  warranting  such  levy  and  sale  are  California,  Indiana,  Ken- 
tucky, New  York,  Tennessee,  Iowa,  and  Louisiana 

Now  if  property  can  have  such  a  situs  within  the  State  as  to  be 
subject  to  seizure  and  sale  on  execution,  it  would  seem  to  follow 
that  the  State  has  power  to  establish  a  like  situs  within  the  State 
for  the  purpose  of  taxation 

It  is  well  settled  that  bank  bills  and  municipal  bonds  are  in  such 
a  concrete  tangible  form  that  they  are  subject  to  taxation  where 


268  MUST  PERTAIN  TO  DISTRICT  TAXED. 

found,  irrespective  of  the  domicil  of  the  owner;  are  subject  to  levy 
and  sale  on  execution,  and  to  seizure  and  delivery  under  replevin; 
and  yet  they  are  but  promises  to  pay — evidences  of  existing  indebt- 
edness. Notes  and  mortgages  are  of  the  same  nature;  and  while 
they  may  not  have  become  so  generally  recognized  as  tangible  per- 
sonal property,  yet  they  have  such  a  concrete  form  that  we  see  no 
reason  why  a  State  may  not  declare  that  if  found  within  its  limits 
they  shall  be  subject  to  taxation. 

It  follows  from  these  considerations  that 

The  decree  of  the  Circuit  Court  must  be  reversed  and  the  case 
remanded  for  further  proceedings. 

Mr.  Justice  HARLAN  and  Mr.  Justice  WHITE  dissented. 


KIRTLAND  V.  HOTCHKISS. 

Supreme  Court  of  the  United  States.    October,  1879. 
100  United  States  491 

Charles  W.  Kirtland,  a  citizen  of  Connecticut,  instituted  this  ac- 
tion for  the  purpose  of  restraining  the  enforcement  of  certain  tax- 
warrants  levied  upon  his  real  estate  in  the  town  in  which  he  re- 
sided, in  satisfaction  of  certain  State  taxes,  assessed  against  him  for 
the  years  1869  and  1870.  The  assessment  was  by  reason  of  his 
ownership,  during  those  years,  of  certain  bonds,  executed  in  Chicago, 
and  made  payable  to  him,  his  executors,  administrators,  or  assigns 
in  that  city,  at  such  place  as  he  or  they  should  by  writing  appoint, 
and,  in  default  of  such  appointment,  at  the  Manufacturers'  National 
Bank  of  Chicago.  Each  bond  declared  that  "it  is  made  under,  and 
is,  in  all  respects,  to  be  construed  by  the  laws  of  Illinois,  and  is 
given  for  an  actual  loan  of  money,  made  at  the  city  of  Chicago,  by 
the  said  Charles  W.  Kirtland  to  the  said  Edwin  A.  Cummins,  on  the 
day  of  the  date  hereof."  They  were  secured  by  deeds  of  trust,  exe- 
cuted by  the  obligor  to  one  Perkins,  of  that  city,  upon  real  estate 
therein  situated,  the  trustees  having  power  by  the  terms  of  that  deed 
to  sell  and  convey  the  property  and  apply  the  proceeds  in  payment 
of  the  loan,  in  case  of  default  on  the  part  of  the  obligor  to  perform 
the  stipulations  of  the  bond. 

The  statute  of  Connecticut,  under  which  the  assessment  was  made, 
declares,  among  other  things,  that  personal  property  in  that  State  "or 
elsewhere"  should  be  deemed  for  purposes  of  taxation,  to  include  all 
moneys,  credits,  choses  in  action,  bonds,  notes,  stocks  (except  United 


KIRTLAND  V.  HOTCHKISS.  269 

States  stocks),  chattels  or  effects,  or  any  interest  thereon;  and  that 
such  personal  property  or  interest  thereon,  being  the  property  of  any 
person  resident  in  the  State,  should  be  valued  and  assessed  at  its  just 
and  true  value  in  the  tax-list  of  the  town  where  the  owner  resides. 
The  statute  expressly  exempts  from  its  operation  money  or  property 
actually  invested  in  the  business  of  merchandizing  or  manufacturing, 
when  located  out  of  the  State.  Conn.  Revision  of  1866,  p.  709,  tit. 
64,  c.  1,  sect.  8. 

The  court  below  held  that  the  assessments  complained  of  were  in 
conformity  to  the  State  law,  and  that  the  law  itself  did  not  infringe 
any  constitutional  right  of  the  plaintiff. 

This  writ  of  error  is  prosecuted  by  Kirtland  upon  the  ground, 
among  others,  that  the  statute  of  Connecticut  thus  interpreted  and 
sustained  is  repugnant  to  the  Constitution  of  the  United  States. 

Mr.  Justice  HARLAN,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

We  will  not  follow  the  interesting  argument  of  counsel  by  enter- 
ing upon  an  extended  discussion  of  the  principles  upon  which  the 
power  of  taxation  rests  under  our  system  of  constitutional  govern- 
ment. Nor  is  it  at  all  necessary  that  we  should  now  attempt  to 
state  all  limitations  which  exist  upon  the  exercise  of  that  power, 
whether  they  arise  from  the  essential  principles  of  free  government 
or  from  express  constitutional  provisions.  We  restrict  our  remarks 
to  a  single  question,  the  precise  import  of  which  will  appear  from 
the  preceding  statement  of  the  more  important  facts  of  this  case. 

In  McCulloch  v.  State  of  Maryland,  (4  Wheat.  428),  this  court" 
considered  very  fully  the  nature  and  extent  of  the  original  right 
of  taxation  which  remained  with  the  States  after  the  adoption  of 
the  Federal  Constitution.  It  was  there  said  "that  the  power  of 
taxing  the  people  and  their  property  is  essential  to  the  very  exist- 
ence of  government,  and  may  be  legitimately  exercised  on  the  ob- 
jects to  which  it  is  applicable  to  the  utmost  extent  to  which  the 
government  may  choose  to  carry  it."  Tracing  the  right  of  taxation 
to  the  source  from  which  it  was  derived,  the  court  further  said: 
"It  is  obvious  that  it  is  an  incident  of  sovereignty,  and  is  coexten- 
sive with  that  to  which  it  is  an  incident.  All  subjects  over  which 
the  sovereign  power  of  a  State  extends  are  objects  of  taxation,  but 
those  over  which  it  does  not  extend  are,  upon  the  'soundest  princi- 
ples, exempt  from  taxation." 

"This  vital  power,"  said  this  court  in  Providence  Banff  \.  Bill- 
ingx,  (4  Pet.  563),  "may  be  abused;  but  the  Constitution  of  the 
United  States  was  not  intended  to  furnish  the  corrective  for  every 


270  MUST  PERTAIN  TO  DISTRICT  TAXED. 

abuse  of  power  which  may  be  committed  by  the  State  governments. 
The  interest,  wisdom,  and  justice  of  the  representative  body,  and  its 
relations  with  its  constituents,  furnish  the  only  security,  when  there 
is  no  express  contract,  against  unjust  and  excessive  taxation,  as  well 
as  against  unwise  legislation." 

In  St.  Louis  v.  The  Ferry  Company,  (11  Wall.  423),  and  in 
State  Tax  on  Foreign-held  Bonds,  (15  id.  300),  the  language  of 
the  court  was  equally  emphatic. 

In  the  last  named  case  we  said  that  "unless  restrained  by  pro- 
visions of  the  Federal  Constitution,  the  power  of  the  State  as  to  the 
mode,  form  and  extent  of  taxation  is  unlimited,  where  the  subjects 
to  which  it  applies  are  within  her  jurisdiction." 

We  perceive  no  reason  to  modify  the  principles  announced  in 
these  cases  or  to  question  their  soundness.  They  are  fundamental 
and  vital  in  the  relations  which,  under  the  Constitution,  exist  be- 
tween the  United  States  and  the  several  States.  Upon  their  strict 
observance  depends,  in  no  small  degree,  the  harmonious  and  suc- 
cessful working  of  our  complex  system  of  government,  Federal  and 
State.  It  may,  therefore,  be  regarded  as  the  established  doctrine  of 
this  court,  that  so  long  as  the  State,  by  its  laws,  prescribing  the 
mode  and  subjects  of  taxation,  does  not  entrench  upon  the  legiti- 
mate authority  of  the  Union,  or  violate  any  right  recognized,  or 
secured,  by  the  Constitution  of  the  United  States,  this  court,  as 
between  the  State  and  its  citizen,  can  afford  him  no  relief  against 
State  taxation,  however  unjust,  oppressive,  or  onerous. 

Plainly,  therefore,  our  only  duty  is  to  inquire  whether  the  Con- 
stitution prohibits  a  State  from  taxing,  in  the  hands  of  one  of  its 
resident  citizens,  a  debt  held  by  him  upon  a  resident  of  another 
State,  and  evidenced  by  the  bond  of  the  debtor,  secured  by  deed  of 
trust  or  mortgage  upon  real  estate  situated  in  the  State  in  which 
the  debtor  resides. 

The  question  does  not  seem  to  us  to  be  very  difficult  of  solution. 
The  creditor,  it  is  conceded,  is  a  permanent  resident  within  the 
jurisdiction  of  the  State  imposing  the  tax.  The  debt  is  property  in 
his  hands  constituting  a  portion  of  his  wealth,  from  which  he  is 
under  the  highest  obligation,  in  common  with  his  fellow-citizens  of 
the  same  State,  to  contribute  for  the  support  of  the  government 
whose  protection  he  enjoys. 

That  debt,  although  a  species  of  intangible  property,  may,  for 
purposes  of  taxation,  if  not  for  all  others,  be  regarded  as  situated 
at  the  domicile  of  the  creditor.  It  is  none  the  less  property  because 
its  amount  and  maturity  are  set  forth  in  a  bond.  That  bond, 


KIRTLAND  V.  HOTCHKISS.  271 

wherever  actually  held  or  deposited,  is  only  evidence  of  the  debt, 
and  if  destroyed,  the  debt — the  right  to  demand  payment  of  the 
money  loaned,  with  the  stipulated  interest — remains.  Nor  is  the 
debt,  for  purposes  of  taxation,  affected  by  the  fact  that  it  is  secured 
by  mortgage  upon  real  estate  situated  in  Illinois.  The  mortgage  is 
but  a  security  for  the  debt,  and,  as  held  in  State  Tax  on  Foreign- 
held  Bonds  (supra),  the  right  of  the  creditor  "to  proceed  against 
the  property  mortgaged,  upon  a  given  contingency,  to  enforce  by 

its  sale  the  payment  of  his  demand, has  no  locality 

independent  of  the  party  in  whom  it  resides.  It  may  undoubtedly 
be  taxed  by  the  State  when  held  by  a  resident  therein,"  &c.  Cooley 
on  Taxation,  15,  63,  134/270.  The  debt,  then,  having  its  situs  at 
the  creditor's  residence,  both  he  and  it  are,  for  the  purposes  of  tax- 
ation, within  the  jurisdiction  of  the  State.  It  is,  consequently,  for 
the  State  to  determine,  consistently  with  its  own  fundamental  law, 
whether  such  property  owned  by  one  of  its  residents  shall  contrib- 
ute, by  way  of  taxation,  to  maintain  its  government.  Its  discretion 
in  that  regard  cannot  be  supervised  or  controlled  by  any  depart- 
ment of  the  Federal  government,  for  the  reason,  too  obvious  to  re- 
quire argument  for  its  support,  that  such  taxation  violates  no  pro- 
vision of  the  Federal  Constitution.  Manifestly  it  does  not,  as  is 
supposed  by  counsel,  interfere  in  any  true  sense  with  the  exercise 
by  Congress  of  the  power  to  regulate  commerce  among  the  several 
States.  Nathan  v.  Louisiana,  8  How.  73;  Cooley  on  Taxation,  62. 
Xor  does  it,  as  is  further  supposed,  abridge  the  privileges  or  im- 
munities of  citizens  of  the  United  States,  or  deprive  the  citizens  of 
life,  liberty  or  property  without  due  process  of  law,  or  violate  the 
constitutional  guaranty  that  the  citizens  of  each  State  shall  be  en- 
titled to  all  privileges  of  citizens  in  the  several  States. 

Whether  the  State  of  Connecticut  shall  measure  the  contribution 
which  persons  resident  within  its  jurisdiction  shall  make  by  way 
of  taxes,  in  return  for  the  protection  it  affords  them,  by  the  value 
of  the  credits,  choses  in  action,  bonds  or  stocks  which  they  may 
own  (other  than  such  as  are  exempted  or  protected  from  taxation 
under  the  Constitution  and  laws  of  the  United  States),  is  a  matter 
which  concerns  only  the  people  of  that  State,  with  which  the  Fed- 
eral government  cannot  rightly  interfere. 

Judgment  affirmed. 


272  MUST  PERTAIN  TO  DISTRICT  TAXED. 


MILLER  V.  PENNSYLVANIA. 

Supreme  Court  of  Pennsylvania.     November,  1885. 
Ill  Pennsylvania  State  321. 

Mr.  Justice  GREEN  delivered  the  opinion  of  the  court,  January 
4th,  1886. 

The  third  clause  of  the  will  of  David  Richey  is  undoubtedly  a 
positive  and  peremptory  order  to  his  executors  to  sell  all  of  the 
real  estate  in  question  in  this  case.  All  of  the  numerous  legacies 
which  are  given  by  the  following  clauses  of  the  will  are  payable  in 
money  out  of  the  proceeds  of  the  property  sold  under  the  direction 
contained  in  the  third  clause.  Under  all  the  decisions  it  cannot  be 
questioned  that  the  third  clause  of  the  will  operated  a  conversion 
of  the  residuary  real  estate  into  personalty  efficacious  from  the 
moment  of  the  testator's  death 

Had  there  been  a  mere  discretion  to  sell,  as  was  the  case  in  Dray- 
ton's  Appeal,  11  P.  F.  S.  172,  we  should  have  felt  bound  to  hold 
there  was  no  conversion,  and  that  as  the  land  was  situated  in  an- 
other State  it  would  not  be  subject  to  collateral  inheritance  tax,  as 
was  decided  in  Commonwealth  v.  Coleman,  2  P.  F.  S.  468.  But 
as  the  order  to  sell  was  absolute,  and  worked  a  conversion  which 
was  not  affected  by  a  permission  to  convey  parts  of  the  land  in  sat- 
isfaction of  legacies,  we  have  no  choice  to  regard  it  other  than  per- 
sonalty. As  such,  it  must  be  regarded  as  passing  by  the  law  of 
the  domicile,  and  hence  subject  to  the  tax 

We  cannot  regard  as  of  any  efficacy  the  contention  that  conver- 
sion is  to  be  considered  only  for  the  specific  purpose  of  paying  lega- 
cies, and  that  for  all  other  purposes  the  real  estate  must  be  treated 
as  such. 

It  is  the  legacies  themselves  that  are  subject  to  the  tax.  As  these 
legacies  pass  to  the  legatees  only  in  the  form  of  money,  we  cannot 
regard  them  as  other  than  personalty.  If  any  of  the  real  estate 
should  be  conveyed  to  legatees  in  satisfaction  of  their  legacies,  it 
would  only  be  as  a  substituted  equivalent  for  the  pecuniary  sun 

of  the  legacies.    ' 

Judgment  affirmed. 


HANDLEY'S  ESTATE.  273 


HANDLEY'S  ESTATE. 

Supreme  Court  of  Pennsylvania.     February,  1897. 
181  Pennsylvania  State  339. 

Opinion  by  Mr.  Justice  MITCHELL. 

The  first  and  most  important  question  in  this  case  is  the  liability 
of  testator's  lands  in  Virginia  to  assessment  for  collateral  inheri- 
tance tax.  The  effort  of  a  state  to  impose  a  tax  which  must  in 
effect  come  out  of  land  beyond  its  boundaries,  however  indirect  or 
ingenious  the  mode  of  exaction,  has  always  been  a  matter  of  very 
questionable  jurisdiction.  It  is  universally  conceded  that  the  tax 
cannot  be  laid  directly,  and  nowhere  is  this  rule  stated  more  posi- 
tively than  in  our  own  cases.  See  Bittinger's  Estate,  129  Pa.  338; 
Com.  v.  Coleman's  Admr.,  52  Pa.  468;  Drayton's  Appeal,  61  Pa. 
172.  'And  the  collateral  inheritance  tax,  being  a  tax  on  the  prop- 
erty passing  from  the  decedent,  and  not  a  mere  succession  duty  im- 
posed on  the  recipient  (Bittinger's  Est.,  supra),  is  within  the  de- 
fect of  power  to  impose  it  on  land  outside  of  the  state. 

The  border  line  however  is  reached  when  property  which  is  in 
fact  real  estate  is  to  be  treated  as  personalty  under  the  doctrine  of 
equitable  conversion.  On  this  subject  two  different  views  have  been 
entertained  by  different  courts.  In  Custance  v.  Bradshaw,  4  Hare 
315,  land  was  held  by  a  partnership,  and  the  interest  of  one  part- 
ner who  had  died  was  sold  to  another  partner.  It  was  claimed  that 
this  interest  was  personalty  and  liable  to  probate  duty.  But  Vice 
Chancellor  Wigram  held  that  conversion  being  an  equitable  fiction 
would  only  be  carried  to  the  extent  necessary  to  accomplish  the 
equitable  result  aimed  at,  and  "would  not  alter  the  nature  of  the 
property  for  the  purpose  only  of  subjecting  it  to  fiscal  claims  to 
which  at  law  it  was  not  liable  in  its  existing  state."  More  recent 
English  cases  have  somewhat  modified  this  decision  so  far  as  re- 
lates to  land  held  by  partners  for  partnership  purposes.  See  Dos 
Passes  on  Inheritance  Tax  Law,  Sec.  46b,  and  32  Am.  Law  Reg. 
X.  S.  474,  note  by  Mr.  Howard  W.  Page.  But  the  Court  of  Ap- 
peals of  New  York  adopted  the  same  view  as  late  as  1893.  Matter 
>.f  Swiff s  Estate,  137  X.  Y.  77;  and  Matter  of  Curtis'  Est.,  142 
X.  Y.  219,  where  it  is  said,  "it  was  never  intended  by  the  law  to 
tax  a  theory  having  no  real  substance  behind  it,"  and  quoting 
Swift's  Est.,  supra,  "the  question  of  taxation  is  one  of  fact,  and 
cannot  turn  on  theories  or  fiction." 

In  Pennsylvania,  however,  the  other  view  was  taken  in  Miller  v. 
18 


274  MUST  PERTAIN  TO  DISTRICT  TAXED. 

Com.,  Ill  Pa.  321,  where  it  was  held  that,  as  the  testator  had  per- 
emptorily directed  a  sale  of  the  land  and  a  distribution  of  the  pro- 
ceeds, the  doctrine  of  conversion  applied,  and  the  actual  situs  of  the 
land  was  immaterial,  as  what  passed  under  the  will  was  not  the 
land  but  the  proceeds,  which  were  personalty  and  liable  to  the  tax. 
The  same  rule  was  followed  in  Williamsons  Est.,  153  Pa.  508. 
These  cases  rest  on  the  basis  that  the  testator  intended  and  directed 
not  a  merely  nominal  or  limited  conversion  but  an  actual  conversion 
by  sale,  and  the  blending  of  the  proceeds  with  his  other  personalty 
for  purposes  of  administration  under  his  will.  The  action  of  the 
court  in  dating  such  conversion  from  the  instant  of  death  was  but 
the  application  of  the  general  rule  that  what  is  to  be  done  is  to  be 
treated  in  equity  as  done  already.  Though  this  argument  is  se- 
verely technical,  and  therefore  questionable  in  regard  to  jurisdic- 
tion to  tax  land  in  fact  situated  in  another  state,  yet  it  has  the 
merit  of  being  unanswerably  logical  if  the  premise  be  once  accepted. 
This  court  has  followed  the  argument  unswervingly  to  its  logical 
conclusion,  even  when  the  result  seemed  contrary  to  the  expres? 
legislative  policy  of  the  state.  Thus  in  Coleman's  Est.,  159  Pa.  231, 
where  land  in  Pennsylvania  was  owned  by  a  testator  in  New  York 
whose  will  made  an  equitable  conversion,  the  logical  corollary  of 
Miller  v.  Com.  was  accepted  and  the  land  was  held  to  have  become 
personalty  and  to  follow  the  owner's  domicile,  and  therefore  not  to 
be  taxable  here. 

All  our  cases  agree  that  the  status  of  the  property  at  the  instant 
of  death  must  govern  the  question  of  tax,  both  as  to  liability  and 
amount.  Draytons  App.  61  Pa.  172;  Mellon  s  App.  114  Pa.  564; 
Williamson's  Est.,  153  Pa.  508,  521.  Where,  therefore,  the  con- 
version is  not  imperative,  but  only  permissive  and  rests  in  the  dis- 
cretion of  the  executors  or  others,  it  does  not  become  operative  un- 
til the  exercise  of  the  discretion,  and  in  the  meantime  the  land  re- 
tains its  normal  character.  Drayton's  Appeal,  supra;  Miller  v. 
Com.,  Ill  Pa.  321. 

For  the  same  reasons,  where  the  conversion  though  imperative  is 
not  in  presenti  but  in  futuro,  it  goes  into  effect  only  from  the  hap- 
pening of  the  stipulated  contingency.  This  brings  us  to  the  exact 
question  now  before  us,  and  we  find  it  expressly  decided  in  the  last 
case  on  the  subject.  Bale's  Est.,  161  Pa.  181.  The  testator  left 
lands  in  Missouri  to  his  wife  for  her  life,  and  upon  her  death,  di- 
rected his  executors  to  sell  them  and  invest  the  proceeds  in  mort- 
gages in  St.  Louis  and  pay  the  income  therefrom  to  collaterals.  It 
was  held  by  the  orphan's  court  of  Philadelphia  that  the  proceeds 


MATTER  OF  SWIFT.  275 

were  not  taxable  and  the  decision  was  affirmed.  The  auditing  judge 
put  his  conclusion  directly  on  the  postponement  of  the  conversion, 
and  though  the  court  in  bane  referred  to  the  additional  circum- 
stance that  the  proceeds  were  to  be  invested  in  mortgages  in  St. 
Louis,  yet  it  is  clear  that  that  was  not  a  material  point  in  the 
ratio  decidendi.  Mortgages,  no  matter  what  the  situs  of  the  land" 
pledged,  are  personal  property,  and  if  the  conversion  had  been  im- 
mediate, no  direction  as  to  the  investment  of  the  proceeds  could 
have  exempted  them  from  the  tax.  The  ground  of  the  decision, 
which  is  the  logical  result  of  the  principles  adopted  in  all  the  pre- 
ceding cases,  is  that  the  tax  is  assessable  at  the  instant  of  death,  and 
where  the  conversion  is  not  referable  to  that  same  instant,  as  where 
it  is  to  take  place  only  in  the  discretion  of  the  executors,  or  a  for- 
tiori where  it  is  postponed  by  the  express  direction  of  the  testator, 
the  land  in  the  meantime  retains  its  real  character,  and  being  out- 
side the  state  is  not  subject  to  taxation. 

In  the  present  case  the  testator  postponed  the  sale  for  twenty 
years,  and  there  was  therefore  no  conversion  when  the  tax  upon 
the  estate  accrued.  The  assignments  of  error  to  the  tax  on  the 
lands  in  Virginia  and  West  Virginia  are  therefore  sustained. 

The  decree  is  reversed  and  the  appraisement  directed  to  be  re- 
adjusted on  the  principles  herein  stated. 


MATTER  OF  SWIFT. 

Court  of  Appeals  of  New  York.     January,  189S. 
137  New  York  77. 

GRAY,  J.  James  T.  Swift  died  in  July,  1890;  being  a  resident 
of  this  state  and  leaving  a  will,  by  which  he  made  a  disposition  of 
all  his  property  among  relatives.  After  many  legacies  of  money  and 
various  articles  of  personal  property,  he  directed  a  division  of  his 
residuary  estate  into  four  portions,  and  he  devised  and  bequeathed 
one  portion  to  each  of  four  persons  named.  The  executors  were 
given  a  power  of  sale  for  the  purpose  of  paying  the  legacies  and  of 
making  the  distribution  of  the  estate.  At  the  time  of  his  death, 
the  testator's  estate  included  certain  real  estate  and  tangible  per- 
sonal property  in  chattels,  situated  within  the  state  of  New  Jersey, 
which  were  realized  upon  by  the  executors  and  converted  into 


276  MUST  PERTAIN  TO  DISTRICT  TAXED. 

moneys  in  hand.  When,  upon  their  application,  an  appraisement 
was  had  of  the  estate,  in  order  to  fix  its  value  under  the  require- 
ments of  the  law  taxing  gifts,  legacies  and  inheritances,  the  surro- 
gate of  the  county  of  New  York,  before  whom  the  matter  came, 
held,  with  respect  to  the  appraisement,  that  the  real  and  personal 
property  situated  without  the  state  of  New  York  were  not  subject 
to  appraisal  and  tax  under  the  law,  and  the  exceptions  taken  by  the 
comptroller  of  the  city  of  New  York  to  that  determination  raise  the 
first  and  the  principal  question  which  we  shall  consider. 

Surrogate  Ransom's  opinion,  which  is  before  us  in  the  record, 
contains  a  careful  review  of  the  legal  principles  which  limit  the 
right  to  impose  the  tax,  and  his  conclusions  are  as  satisfactory  to 
my  mind,  as  they  evidently  were  to  the  minds  of  the  learned  jus- 
tices of  the  General  Term  of  the  Supreme  Court,  who  agreed  in 
affirming  the  surrogate's  decree  upon  his  opinion. 

The  question  here  does  not  relate  to  the  power  of  the  state  to 
tax  its  residents  with  respect  to  the  ownership  of  property  situated 
elsewhere.  That  question  is  not  involved.  The  question  is 
whether  the  legislature  of  the  state,  in  creating  this  system  of  tax- 
ation of  inheritances,  or  testamentary  gifts,  has  not  fixed  as  the 
standard  of  right  the  property  passing  by  will,  or  by  the  intestate 
laws. 

The  effect  of  this  special  tax  is  to  take  from  the  property  a  por- 
tion or  percentage  of  it,  for  the  use  of  the  state,  and  I  think  it 
quite  immaterial  whether  the  tax  can  be  precisely  classified  with  a 
taxation  of  property  or  not.  It  is  not  a  tax  upon  persons.  If  it 
is  called  a  .tax  upon  the  succession  to  the  ownership  of  property ; 
still  it  relates  to  and  subjects  the  property  itself,  and  when  that 
is  without  the  jurisdiction  of  the  state,  inasmuch  as  the  succession 
is  not  of  property  within  the  dominion  of  the  state,  succession  to  it 
cannot  be  said  to  occur  by  permission  of  the  state.  As  to  lands 
this  is  clearly  the  case,  and  rights  in  or  power  over  them  are  de- 
rived from  or  through  the  laws  of  the  foreign  state  or  country.  As 
to  goods  and  chattels  it  is  true;  for  their  transmission  abroad  is 
subject  to  the  permission  of  and  regulated  by  the  laws  of  the  state 
or  country  where  actually  situated.  Jurisdiction  over  them  belongs 
to  the  courts  of  that  state  or  country  for  all  purposes  of  policy, 
or  of  administration  in  the  interests  of  its  citizens,  or  of  those  hav- 
ing enforceable  rights,  and  their  surrender,  or  transmission,  is  upon 
principles  of  comity. 


MATTEE  OF  SWIFT.  277 

When  succession  to  the  ownership  of  property  is  by  the  permis- 
sion of  the  state,  then  the  permission  can  relate  only  to  property 
over  which  the  state  has  dominion  and  as  to  which  it  grants  the 
privilege  or  permission. 

Xor  is  the  argument  available  that,  by  the  power  of  sale  conferred 
upon  the  executors,  there  was  an  equitable  conversion  worked  of  the 
lands  in  Xew  Jersey,  as  of  the  time  of  the  testator's  death,  and, 
hence,  that  the  property  sought  to  be  reached  by  the  tax,  in,  the 
eye  of  the  law,  existed  as  cash  in  this  state  in  the  executor's  hands, 
at  the  moment  of  the  testator's  death.  There  might  be  some  doubt 
whether  the  main  proposition  in  the  argument  is  quite  correct  and 
whether  the  land  did  not  vest  in  the  residuary  legatees,  subject 
to  the  execution  of  the  power  of  sale.  But  it  is  not  necessary  to 
decide  that  question.  Neither  the  doctrine  of  equitable  conversion 
of  lands,  nor  any  fiction  of  situs  of  movables  can  have  any  bearing 
upon  the  question  under  advisement.  The  question  of  the  juris- 
diction of  the  state  to  tax  is  one  of  fact  •  and  cannot  turn  upon 
theories  or  fiction;  which,  as  it  has  been  observed,  have  no  place 
an  a  well  adjusted  system  of  taxation. 

We  can  arrive  at  no  other  conclusion,  in  my  opinion,  than  that 
the  tax  provided  for  in  this  law  is  only  enforceable  as  to  property 
which,  at  the  time  of  the  owner's  death,  was  within  the  territorial 
limits  of  this  state  As  a  law  imposing  a  special  tax,  it  is  to  be 
strictly  construed  against  the  state  and  a  case  must  clearly  be  made 
out  for  its  application.  We  should  incline  against  a  construction 
which  might  lead  to  double  taxation;  a  result  possible  and  probable 
under  a  different  view  of  the  law.  If  the  property  in  a  foreign 
jurisdiction  was  in  land,  or  in  goods  and  chattels,  when,  upon  the 
testator's  death,  a  new  title,  or  ownership,  attached  to  it,  the  bring- 
ing into  this  state  of  its  cash  proceeds,  subsequently,  no  matter  by 
what  authority  of  will,  or  of  statute,  did  not  subject  it  to  the  tax. 
A  different  view  would  be  against  every  sound  consideration  of 
what  constitutes  the  basis  for  such  taxation,  and  would  not  accord 
with  an  understanding  of  the  intention  of  the  legislature,  as  more 
or  less  plainly  expressed  in  these  acts. 

My  brethren  are  of  the  opinion  that  the  tax  imposed  under  the 
act  is  a  tax  on  the  right  of  succession,  under  a  will,  or  by  devolu- 
tion in  case  of  intestacy;  a  view  of  the  law  which  my  considera- 
tion of  the  question  precludes  my  assenting  to. 

They  concur  in  my  opinion  =o  far  as  it  relates  to  the  imposition 
of  a  tax  upon  real  estate  situated  out  of  this  state,  although  owned 


278  MUST  PERTAIN  TO  DISTRICT  TAXED. 

by  a  decedent,  residing  here  at  the  time  of  his  decease;  holding 
with  me  that  taxation  of  such  was  not  intended,  and  that  the  doc- 
trine of  equitable  conversion  is  not  applicable  to  subject  it  to  taxa- 
tion. But  as  to  the  personal  property  of  a  resident  decedent,  where- 
soever situated,  whether  within  or  without  the  state,  they  are  of 
the  opinion  that  it  is  subject  to  the  tax  imposed,  by  the  act. 

The  judgment  below,  therefore,  should  be  so  modified  as  to  ex- 
clude from  its  operation  the  personal  property  in  New  Jersey  and, 
as  so  modified,  it  should  be  affirmed,  without  costs  to  either  party 
as  against  the  other. 

MAYNAKD,  J.,  not  sitting. 


MARYLAND  V.  DALRYMPLE  ET  AL. 

Court  of  Appeals  of  Maryland.    January,  1889. 
70  Maryland  294. 

Me  SHERRY,  J.,  delivered  the  opinion  of  the  court. 

William  H.  Dalrymple,  a  resident  of  California,  died  there  on  the 
twenty-second  of  November,  eighteen  hundred  and  eighty-one,  leav- 
ing a  last  will  and  testament  executed  according  to  the  laws  of  that 
State.  By  his  will  he  bequeathed  all  his  personal  property  to  one 
Marie  E.  Hatch,  now  Marie  E.  Gamble,  also  of  California.  She 
was  not  the  mother,  the  wife,  the  child  nor  lineal  descendant  of  the 
testator.  The  will  was  duly  admitted  to  probate  in  the  Probate 
Court  of  the  decedent' s  domicile,  and  letters  of  administration  were 
there  granted  with  the  will  annexed  to  Peter  Alferitz.  Subse- 
quently a  certified  transcript  of  said  will  and  probate  was  admitted 
by  the  Register  of  Wills  of  said  Baltimore  City  to  record  and  was 
recorded  in  his  office.  Thereafter  letters  of  administration  with  the 
will  annexed,  were  issued  by  the  Orphans'  Court  of  Baltimore  City 
to  the  appellees.  When  William  H.  Dalrymple  died  he  was  entitled 
to  a  one-fourth  undivided  part  of  the  personal  estate  of  his  brother. 
Edwin  A.  Dalrymple,  a  resident  of  the  State  of  Maryland,  who 
died  in  the  City  of  Baltimore  in  October,  eighteen  hundred  and 
eighty-one,  some  three  weeks  prior  to  the  decease  of  William.  Upon 
the  settlement  of  Edwin's  estate  the  appellees  received,  as  adminis- 
trators of  William's  estate,  sundry  certificates  of  National  Bank 
stock  and  Baltimore  City  stock,  several  Missouri  State  bonds  and 
cash,  aggregating  at  the  appraised  value  of  the  securities,  the  sum 


MARYLAND  V.  DALRYMPLK  ET  AL.  279 

of  $27,337.87;  which  was  diminished  by  the  payment  of  costs  and 
expenses  to  the  sum  of  $21,449.21;  but  the  accretions  from  divi- 
dend and  interest  have  since  increased  this  latter  amount  to  the 
sum  of  $27,320.77;  which  the  appellees  now  hold  ready  for  deliv- 
ery to  the  said  Mrs.  Gamble,  the  legatee  named  in  William's  will. 
Upon  this  sum  the  State  of  Maryland  claims  that  the  appellees  owe 
to  the  State  the  collateral  inheritance  tax  of  two  and  one-half  per 
cent,  imposed  by  sec.  102,  of  Art.  81  of  the  Code  of  1888.  Suit 
was  brought  by  the  State  against  the  appellees  for  the  recovery  of 
this  tax.  To  the  declaration,  which  sets  forth  in  detail  the  facts  we 
have  just  outlined,  the  appellees  demurred,  and  the  Court  of  Com- 
mon Pleas  of  Baltimore  sustained  the  demurrer,  and  entered  judg- 
ment thereon  against  the  State.  From  that  judgment  this  appeal 
has  been  taken. 

The  statute  imposing  this  tax  is  in  these  words:  "All  estates, 
real,  personal,  and  mixed,  money,  public  and  private  securities  for 
money  of  every  kind  passing  from  any  person  who  may  die  seized 

and  possessed  thereof,  being  in  this  State, to  any 

person  or  persons,  bodies  politic  or  corporate,  in  trust  or  otherwise, 
other  than  to  or  for  the  use  of  the  father,  mother,  husband,  wife, 

children  and  lineal  descendants  of  the  grantor shall 

be  subject  to  a  tax  of  two  and  a  half  per  centum  on  every  hundred 
dollars  of  the  clear  value  of  such  estate,  money  or  securities  .  .  ." 

It  has  been  settled  by  this  court  in  Tyson  et  al.  v.  State,  28  Md., 
577,  that  such  a  tax  is  free  from  any  constitutional  objection. 

Possessing,  then,  the  plenary  power  indicated,  it  necessarily  fol- 
lows that  the  State  in  allowing  property  actually  located  here,  or 
personal  property  situated  elsewhere  but  owned  by  a  resident,  to  be 
disposed  of  by  will,  and  in  designating  who  shall  take  such  prop- 
erty, where  there  is  no  will,  may  prescribe  such  conditions,  not  in 
conflict  with  or  forbidden  by  the  organic  law,  as  the  Legislature 
may  deem  expedient.  These  conditions,  subject  to  the  limitation 
named,  are,  consequently  wholly  within  the  discretion  of  the  Gen- 
eral Assembly.  The  act  we  are  now  considering  plainly  intended  to 
require  that  a  person  taking  the  benefit  of  a  civil  right  secured  to 
him  under  our  laws  should  pay  a  certain  premium  for  its  enjoy- 
ment. In  other  words,  one  of  the  conditions  upon  which  stranger? 
and  collateral  kindred  may  acquire  a  decedent's  property,  which  is 
subject  to  the  dominion  of  our  laws,  is,  that  there  shall  be  paid  out 
of  such  property  a  tax  of  two  and  a  half  per  cent,  into  the  treasury 
of  the  State.  This,  therefore,  is  not  a  tax  upon  the  property  itself, 


280  MUST  PERTAIN  TO  DISTRICT  TAXED. 

but  is  merely  the  price  exacted  by  the  State  for  the  privilege  ac- 
corded in  permitting  property  so  situated,  to  be  transmitted  by  will 
or  by  descent  or  distribution. 

That  this  is  so  is  abundantly  clear  from  the  language  of  the  stat- 
ute and  its  several  provisions. 

It  is  thus  quite  apparent  that  the  whole  scheme  of  the  law  looks 
to  and  contemplates  the  collection  of  the  tax  through  an  executor 
or  administrator  exercising  authority  under  the  laws  of  this  State, 
and  answerable  to  those  laws  for  the  faithful  performance  of  his 
duties.  Ample  provision  is  made  for  every  possible  contingency  that 
may  arise,  whether  the  decedent  be  a  resident  of  this  State  or  not, 
provided  the  property  be  located  here,  if  he  be  a  non-resident,  or 
be  actually  or  constructively  here,  if  he  be  a  resident.  No  estate 
can  escape  administration  if  the  laws  be  enforced,  and  when  the 
property  passes  into  the  hands  of  the  executor  or  administrator  his 
obligation  to  pay  the  tax  is  fixed  and  his  bond  at  once  becomes 
liable  therefor. 

The  tax,  we  have  said,  is  on  the  transmission  of  the  property  "be- 
ing in  the  State,"  and  no  reason  has  been  assigned  or  can  be  sug- 
gested why  the  broad  language  of  the  statute  and  the  evident  design 
of  the  Legislature  should  be  so  narrowed  and  restricted  as  to  ex- 
empt from  this  tax  the  property  of  a  non-resident  actually  here, 
notwithstanding  that  same  property  may,  for  other  purposes,  be 
treated  as  constructively  elsewhere. 

In  permitting  property  within  the  State,  upon  the  death  of  its 
owner,  to  pass  by  devise  or  descent  or  distribution,  the  Legislature 
has  seen  fit,  where  strangers  or  collateral  kindred  receive  it,  to  ex- 
act, as  the  condition  upon  which  that  privilege  is  granted,  the  tax 
in  question.  The  imposition  and  collection  of  the  tax  cannot,  there- 
fore, depend  upon  the  mere  accidental  residence  of  the  owner. 

Orcutt's  Appeal,  97  Pa.  St.  179,  is  not  analagous  to  the  case  be- 
fore us.  There  a  resident  of  New  Jersey  had  deposited  with  a  Phil- 
adelphia trust  company,  for  safe  keeping,  certain  United  States 
bonds.  He  died  in  New  Jersey,  where  administration  upon  his 
estate  was  duly  granted.  The  trust  company  declined  to  surrender 
these  bonds  to  the  New  Jersey  executor  unless  ancillary  letters 
should  be  taken  out  in  Pennsylvania.  These  letters  were  accord- 
ingly taken  out,  the  bonds  were  received  from  the  trust  company, 
and  being  over-due,  were  collected;  and  thereupon  the  collateral  in- 


MARYLAND  V.  DALRYMPLE  ET  AL.  281 

heritance  tax  was  demanded  and  the  Orphan's  Court  of  Philadel- 
phia directed  it  to  he  paid.  This  order  was  reversed  upon  appeal. 
It  is  obvious  the  bonds  had  no  situs  different  from  the  domicile  of 
their  owner.  They  were  "simply  evidences  of  indebtedness,  not  by 
any  person  or  corporation  within  the  Commonwealth,  but  by  tho 
general  government.  .  .  .  The  testator  intrusted  the  bonds 
temporarily,  for  safe  keeping,  to  the  Fidelity  Company,  but  they 
were  constructively  at  least,  in  his  possession  at  the  time  of  his 
decease."  In  the  case  at  bar  the  property  is  actually  in  this  State. 
It  belonged  to  Edwin  A.  Dalrymple,  who  was,  at  the  time  of  his 
death,  a  resident  of  Maryland.  Upon  his  decease  his  brother  Wil- 
liam became  entitled  to  it.  It  is  still  here  in  Maryland  and  the 
larger  portion  of  it  is  invested  in  the  very  same  stocks  and  securi- 
ties which  Edwin  held  in  his  lifetime. 

We  have  no  difficulty  in  distinguishing  between  this  and  the  Eng- 
lish cases.  In  those  cases  the  several  Acts  of  Parliament  imposing 
probate,  legacy  and  succession  duties  underwent  construction. 

Thus  whilst  the  power  of  Parliament  to  impose  the  tax  without 
reference  at  all  to  the  subject  of  domicile  is  distinctly  recognized; 
it  was  held  that  the  language  of  the  Acts  did  not  furnish  any  indi- 
cation of  an  intention  to  exercise  that  power,  and  that,  therefore, 
the  law  of  the  domicile  of  the  owner  fixed  the  liability  of  his  prop- 
erty to  pay  these  taxes.  In  our  opinion,  for  the  reasons  we  have 
given,  the  Maryland  statute  cannot  be  so  construed. 

It  results  from  what  we  have  said,  that  the  tax  is  payable  in  this 
case,  and  the  amount  of  the  tax  will  depend  upon  the  sum  in  the 
hands  of  the  appellees  payable  to  the  legatee. 

The  judgment  of  the  Court  of  Common  Pleas,  must,  therefore,  be 
reversed,  and  a  new  trial  will  be  awarded. 

Judgment  reversed  and  new  trial  awarded. 

See  also  cases  reported  in  Chap.  X  under  IV  Situs  of  property. 


CHAPTER  VL 
EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

I.    INDIVIDUAL  DISCRIMINATION. 
STATE  EX  EEL.    TRUSTEES  V.  TOWNSHIP  COMMITTEE. 

Supreme  Court  of  New  Jersey.     November,  1872 
7  Vroom  66. 

DEPUE,  J.  Application  being  made  by  the  school  trustees  to  the 
township  committee  for  the  issuing  of  bonds  to  the  amount  of 
$3500,  under  the  act  above  recited,  the  township  committee  declined 
to  issue  the  same,  whereupon  application  was  made  to  this  court  for 
a  writ  of  mandamus  to  compel  the  committee  to  issue  such  bonds. 

The  amount  of  tax  assessed  in  the  school  district  for  the  building 
of  a  school-house  in  the  year  1871  was  $1000.  Of  this  amount  it 
appears  by  the  depositions  that  $807  have  been  collected.  The  res- 
idue is  in  litigation.  The  act  directs  that  the  first  assessment  upon 
the  persons  and  property  in  the  school  district  liable  to  taxation  to 
provide  the  means  of  paying  the  bonds,  shall  not  exceed  $2000,  and 
that  in  assessing  the  sum  the  township  committee  shall  so  direct  to 
be  raised  the  amount  in  excess  of  $1000  that  it  shall  be  assessed  only  on 
those  taxable  inhabitants  of  the  school  district  who  have  not  paid 
the  assessment  against  them  for  the  year  1871.  Under  this  section 
the  township  committee  are  empowered  to  direct  the  assessment  of 
the  sum  of  $1000  upon  certain  individuals  who  are  delinquents, 
whose  delinquency  in  all  is  less  than  $200.  It  is  insisted  by  the 
defendants'  counsel  that  the  mode  of  levying  the  tax  contemplated 
by  this  act  is  not  a  legitimate  method  of  taxation,  and  that  there- 
fore no  adequate  provision  is  made  for  the  payment  of  the  bonds  of 
the  township  by  taxation  upon  the  school  district. 

The  power  of  the  legislature  to  validate  the  assessment  of  taxe* 
which  is  liable  to  be  avoided  for  mere  irregularities  in  the  proceed- 
ings in  making  the  assessment,  is  well  settled.  State  v.  Apgar,  2 
Vroom  358;  State  v.  Town  of  Union,  4  Ib.  350.  The  act  in  ques- 
tion has  none  of  the  qualities  of  an  act  validating  the  proceedings 
in  levying  the  former  tax.  It  is  the  assumption  by  the  legislature 
of  the  power  to  subject  the  delinquents  to  a  penalty  of  $1,000  for 
a  delinquency  of  $200,  in  the  discretion  of  the  township  committee. 

282 


STATE  TRUSTEES  V.  TOWNSHIP  COMMITTEE.      283 

That  this  is  the  real  import  of  the  act  is  apparent.  Indeed,  the 
learned  and  astute  counsel  who  argued  this  motion  in  behalf  of  the 
relators,  so  clearly  discerned  the  exact  import  of  this  legislation 
that  he  was  driven  to  maintain  before  the  court  that  it  was  within 
the  power  of  the  legislature  to  select  certain  individuals  as  subjects 
of  taxation,  and  impose  upon  them  individually  such  burdens  as  the 
legislature  saw  fit,  even  to  the  extent  of  the  payment  of  the  state 
debt,  or  defraying  the  entire  expenses  of  the  state  government. 

The  power  of  the  legislature  in  the  matter  of  taxation  is  said  to 
be  unlimited.  Such  undoubtedly  is  the  theory  of  our  government. 
But  it  is  not  every  exaction  made  under  color  of  taxation  that  can 
be  supported  as  the  legitimate  exercise  of  the  sovereign  power  of 
taxation.  It  is  of  the  very  essence  of  taxation  that  it  should  be 
equal  and  uniform,  and  that  where  the  burden  is  common  there 
should  be  a  common  contribution  to  discharge  it.  Cooley's  Const. 
Law  495.  Not  that  it  is  essential  to  the  validity  of  taxation  that 
it  should  be  levied  according  to  rules  of  abstract  justice.  The  leg- 
islature may  create  special  taxing  districts,  defining  their  limits  in 
its  discretion,  or  designate  certain  occupations,  trades  or  employ- 
ments as  special  subjects  for  taxation;  or  discriminate  between  dif- 
ferent kinds  of  property  in  the  rate  of  taxation;  or  may  apportion 
the  taxes  among  the  classes  of  persons  or  property  made  liable  to 
taxation,  in  such  manner  as  may  seem  fit.  In  this  way  inequalities 
in  the  share  of  the  public  burden,  or  even  double  taxation  may 
arise  without  any  relief  except  by  appeal  to  the  legislature.  But 
when  the  taxing  district  has  been  defined,  and  the  classes  of  per- 
sons or  kind  of  property  specially  set  apart  for  taxation  have  been 
designated,  the  tax  must  be  apportioned  among  those  who  are  to 
bear  the  burden  upon  the  rule  of  uniformity.  Cooley's  Const.  Law, 
pp.  493-513.  Taxation  operates  upon  a  community,  or  a  class  in  a 
community,  according  to  some  rule  of  apportionment.  When  the 
amount  levied  upon  individuals  is  determined  without  regard  to  the 
amount  or  value  exacted  from  any  other  individual  or  classes  of  in- 
dividuals, the  power  exercised  is  not  that  of  taxation  but  of  eminent 
domain.  The  People  V.  Mayor  of  Brooklyn,  4  Comstock  420.  A 
tax  upon  the  persons  or  property  of  A,  B  and  C  individually,  wheth- 
er designated  by  name  or  in  any  other  way,  which  is  in  excess  of  an 
equal  apportionment  among  the  persons  or  property  of  the  class  of 
persons  or  kind  of  property  subject  to  the  taxation,  is,  to  the  extent 
of  such  excess,  the  taking  of  private  property  for  a  public  use  with- 
out compensation.  The  process  is  one  of  confiscation  and  not  of 
taxation. 


284      EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

But  it  is  argued  that  the  township  Committee  may,  in  executing 
their  duties  under  the  act,  so  perform  them  as  that  no  greater  sum 
will  be  levied  upon  the  delinquents,  or  their  property,  than  the 
amount  of  their  unpaid  tax,  and  that  therefore  a  valid  tax  may  be 
laid  under  the  act.  The  argument  may  be  sound.  On  that  sub- 
ject the  court  express  no  opinion.  For  the  present  purposes  it  is 
sufficient  that  the  act  in  question  gives  to  the  township  committee 
the  power  arbitrarily  to  impose  a  sum  in  excess  of  such  delinquency. 
Nor  does  it  appear  except  by  the  recital  in  the  preamble  of  the  act, 
lhat  the  refusal  of  the  delinquents  to  pay  the  former  assessment  is 
based  on  mere  irregularities  in  the  mode  of  assessment.  For  aught 
that  is  shown,  the  legal  objections  to  the  collection  of  the  tax  as- 
sessed against  them,  are  of  such  nature  as  to  be  beyond  the  power 
of  the  legislature  to  remove. 

The  school  district  in  question  is  one  of  the  school  districts  in 
the  township  of  Readington.  The  act  does  not  impose  upon  the 
township  the  burden  of  erecting  the  school  building.  It  contem- 
plates that  the  cost  shall  ultimately  be  borne  by  the  taxable  inhab- 
itants of  the  district,  although  the  only  means  of  reimbursement  is 
by  the  taxation  provided  for. 

The  court  should  not  award  a  mandamus  to  enforce  this  compul- 
sory suretyship  by  the  township  for  the  debts  of  the  school  district, 
where  any  well  grounded  doubt  exists  whether  the  means  of  indem- 
nification provided  are  such  as  can  be  made  available.  It  is  better 
to  subject  the  school  district  to  the  inconvenience  of  a  delay  until 
further  legislative  action  may  be  obtained,  than  to  involve  the  town- 
ship in  a  litigation  to  enforce  the  collection  of  a  tax  of  doubtful 
constitutionality. 

The  application  is  denied,  and  rule  to  show  cause  discharged. 


OILMAN  V.  CITY  OF  SHEBOYGAN. 

Supreme  Court  of  the  United  States.     December,  1862. 
2  Black,  510. 

Mr.  Justice  SWAYNE.  This  is  a  suit  in  equity  brought  here  by 
appeal  from  the  District  Court  of  the  United  States  for  the  District 
of  Wisconsin.  The  bill  states  as  follows: 

The  complainant  is  the  owner  of  a  large  amount  of  real  estate  in 
the  city  of  Sheboygan,  which  is  described  in  the  bill. 


G1LMAN  V.  CITY  OF  SHEBOYGAN.  285 

[Under  acts  of  the  legislature]  the  City  has  made  loans  and  is- 
sued its  bonds  therefor  to  the  amount  of  $200,000. 

The  legislature  passed  a  subsequent  Act  which  is  as  follows: 

"Section  1.  All  taxes  hereafter  levied  by  the  common  council 
of  the  city  of  Sheboygan  for  the  [payment]  of  principal  or  interest 
of  any  bonds  issued  or  to  be  issued  by  said  City  to  aid  in  the  con- 
struction of  any  railroad,  plank  road,  or  for  any  improvement  of 
the  harbor  at  the  mouth  of  the  Sheboygan  River,  shall  be  levied  by 
said  council  on  the  real  estate  of  said  city  exclusively. 

"Sec.  2.  All  acts  or  parts  of  acts  that  conflict  with  the  pro- 
visions of  this  act  are  hereby  repealed. 

"Sec.  3.  This  act  shall  take  effect  and  be  in  force  from  and  after 
its  passage. 

"Approved  March  7,  1857." 

In  the  year  1857,  the  City  Council  under  the  last  named  act,  lev- 
ied a  tax  upon  all  real  estate  within  the  limits  of  the  City  of  six 
cents  upon  each  dollar  of  the  valuation  thereof  "for  its  harbor  loans, 
railroad  and  plank  road  bonds,"  "and  did  not  levy  said  sum  or  any 
part  thereof  upon  any  other  kind  of  property  within  the  said  City 
of  Sheboygan  for  the  said  harbor  loans,  railroad  and  plank  road 
bonds,  but  levied  the  tax  for  the  payment  of  the  interest  upon 
those  specific  objects  entirely  and  solely  out  of  the  real  estate  with- 
in said  City  limits;  and  that  the  real  estate  above  stated  and  set 
forth  in  this  complaint  was  included  in  and  was  taxed  at  the  rate 
aforesaid,  and  for  the  purpose  aforesaid/' 

At  the  time  this  tax  was  levied,  there  was  personal  property  in 
the  City  of  Sheboygan  to  the  amount  of  three  or  four  hundred 
thousand  dollars,  liable  to  taxation,  and  upon  which  no  tax  was 
levied  for  either  of  said  purposes  for  the  year  1857.  The  act  of 
March  7,  1857,  and  the  tax  levied  under  it,  are  alleged  to  be  void. 
Defendant,  Geele,  is  the  treasurer  of  said  City,  and  as  such  author- 
ized to  execute  deeds  for  land  sold  for  taxes  when  the  time  for  re- 
demption expires.  The  complainant's  property  in  the  City  has  been 
sold  for  said  tax  and  bought  in  by  the  City.  Geele  threatens  to 
execute  deeds  to  the  City  for  the  same.  The  time  for  redemption 
is  about  to  expire. 

The  deeds,  it  is  alleged,  will  cast  a  cloud  upon  complainant's  title, 
embarrass  him  in  disposing  of  the  property,  and  render  it  less  valua- 
ble to  him.  The  prayer  of  the  bill  is  that  the  treasurer  be  perpet- 
ually enjoined  from  executing,  and  the  City  from  receiving,  such' 
deeds,  and  for  general  relief 


286      EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

Is  the  Act  of  1857  invalid,  because  it  requires  the  tax  in  ques- 
tion to  be  levied  exclusively  upon  the  real  estate  of  the  city? 

The  provisions  of  the  State  Constitution,  to  which  our  attention 
has  been  called,  as  bearing  upon  the  subject,  are  the  following: 

Art.  VIII.  "Sec.  1. — The  rule  of  taxation  shall  be  uniform,  and 
taxes  shall  be  levied  upon  such  property  as  the  legislature  shall  pre- 
scribe." 

In  Knowlton  v.  The  Supervisors  of  Rock  County,  (9  Wis.  Rep. 
410),  the  section  requiring  uniformity  of  taxation  underwent  an 
able  and  exhaustive  examination.  The  Court  affirmed  the  following 
propositions : 

"The  levying  of  taxes  by  the  authorities  of  a  county,  city  or 
town,  for  their  support  is  as  much  the  exercise  of  the  taxing  power 
as  when  directly  by  the  State  for  its  support.  The  State  acts  by 
the  municipal  governments,  and  their  acts  in  levying  taxes  are  as 
much  the  act  of  the  State  as  if  the  State  acted  by  its  own  officers. 

"The  Constitution  of  the  State  requires,  as  a  rule  in  levying  taxes, 
that  the  valuation  must  be  uniform  and  in  all  cases  alike  or  equal, 
operating  alike  upon  all  the  taxable  property  throughout  the  terri- 
torial limits  of  the  State  or  municipality  within  which  the  tax  is  to 
be  raised.  And  where  the  Legislature  prescribed  a  different  rule, 
the  act  is  a  departure  from  the  constitution  and  therefore  void. 

"The  Constitution  has  fixed  one  unbending  uniform  rule  of  taxa- 
tion for  the  State,  and  property  cannot  be  classified  and  taxed  as 
classed  by  different  rules. 

"The  provision  of  the  Constitution,  that  taxes  shall  be  levied  upon 
such  property  as  ..the  Legislature  shall  prescribe,  does  not  sanction  a 
discrimination  which  provides  for  taxing  a  particular  kind  of  prop- 
erty for  the  support  of  Government  by  a  different  rule  from  that 
by  which  other  property  is  taxed;  for  when  the  kind  of  property  is 
prescribed  the  rule  of  taxation  must  be  uniform.  All  kinds  of 
property  must  be  taxed  uniformly,  or  be  absolutely  exempt." 

In  this  case,  under  the  provisions  of  the  charter  of  the  City  of 
Janesville,  lands  within  the  City  limits  laid  out  into  City  lots,  and 
other  lands  not  so  laid  out,  had  been  taxed  at  different  rates,  and 
the  property  of  plaintiff  had  been  sold  for  the  non-payment  of  the 
taxes.  The  Court  held  the  tax  void,  and  enjoined  the  treasurer 
from  executing  deeds  to  the  tax  purchasers. 

In  the  case  of  Weeks  v.  The  City  of  Milwaukee  et  al.,  (10  Wis. 
242),  the  preceding  case  was  considered  and  approved  by  the  Court. 
The  proposition  that  the  constitutional  provision  requiring  the  "rule 


OILMAN  V.  CITY  OF  SHEBOYGAN.  287 

of  taxation  to  be  uniform"  extends  to  municipal  corporations,  and 
that  the  constitutional  provision  requiring  the  Legislature  to  restrict 
their  powers  of  taxation  was  only  intended  to  furnish  a  further  pro- 
tection, were  expressly  and  unanimously  re-affirmed.  They  held 
further,  that  where  the  assessors  of  the  City  of  Milwaukee,  in  obe- 
dience to  an  ordinance  of  that  City,  omitted  to  assess  property  to 
the  value  of  $150,000,  which  ought  to  have  been  assessed,  and  that 
property  was  thereby  exempted  from  taxation,  the  omission  was 
fatal  to  the  entire  tax,  and  that  the  complainant's  taxes  being  in- 
creased by  the  omission  he  was  entitled  to  an  injunction  to  restrain 
the  sale  of  his  lands  for  such  illegal  taxes. 

In  Sanderson  v.  Cross,  (10  Wis.  282),  the  doctrines  of  Knowlton 
v.  The  Supervisors  of  Rock  County,  were  again  unanimously  ap- 
proved. 

In  their  opinion  the  court  adopt  the  following  language,  from 
the  City  of  Zanesville  v.  Richards,  (5  Ohio  St.  589)  :  "The  Gen- 
eral Assembly  is  no  longer  invested  with  the  discretion  to  apportion 
the  tax,  and  to  determine  upon  what  property  and  in  what  propor- 
tion the  burden  shall  be  laid.  A  uniform  rate  per  cent  must  be  lev- 
ied upon  all  property  subject  to  taxation  according  to  its  true  val- 
uation money,  so  that  all  may  bear  an  equal  burden." 

The  Ohio  case  was  decided  under  provisions  in  the  Constitution 
of  that  State  similar  to  those  in  the  Constitution  of  Wisconsin,  to 
which  we  have  referred. 

In  the  Attorney  General  v.  The  Winnebago  Lake  and  Fox  River 
Plank  Road  Company,  (11  Wis.  42),  the  Court  say:  "It  cannot 
be  denied  that  under  the  power  of  exemption  unjust  enactments  in 
respect  of  the  power  of  taxation  might  be  made.  But  those  who 
framed  the  Constitution  did  not  see  fit  to  prevent  such  evils  by  de- 
priving the  Legislature  of  the  power.  But  they  did  provide  that 
whatever  property  was  made  taxable  at  all  should  be  taxed  by  a 
uniform  rule,  which  was  designed  to  secure  equality  in  the  burdens 
as  between  the  different  kinds  of  taxable  property,  but  of  course  not 
as  between  property  taxable  and  that  not  taxable." 

The  Court  refer  with  approbation  to  the  Exchange  Bank  of  Col- 
umbus v.  Hines,  (3  Ohio  St.  1.)  In  that  case  the  Supreme  Court 
of  Ohio  say:  "Taxing  is  required  to  be  by  a  'uniform  rule,'  that 
is,  by  one  and  the  same  unvarying  standard.  Taxing  by  a  uniform 
rule  requires  uniformity  not  only  in  the  rate  of  taxation,  but  also 
uniformity  in  the  mode  of  assessment  upon  the  taxable  valuation. 
Uniformity  in  taxing  implies  equality  in  the  burden  of  taxation, 
and  this  equality  of  burden  cannot  exist  without  uniformity  in  the 


288      EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

mode  of  assessment,  as  well  as  the  rate  of  taxation.  But  this  is  not 
all.  The  uniformity  must  be  coextensive  with  the  territory  to  which 
it  applies.  If  a  State  tax,  it  must  be  uniform  all  over  the  State. 
If  a  county  or  city  tax,  it  must  be  uniform  throughout  the  extent 
of  the  territory  to  which  it  is  applicable.  But  the  uniformity  in 
the  rule  required  by  the  Constitution  does  not  stop  here.  It  must 
extend  to  all  property  subject  to  taxation,  so  that  all  property  may 
be  taxed  alike, — equally — which  is  taxing  by  a  uniform  rule." 

Acting  upon  a  principle,  recognized  in  its  administration  from 
the  earliest  period  of  its  history,  this  Court  considers  itself  boun.l 
in  cases  like  this  to  follow  the  settled  adjudications  of  the  highest 
State  Court,  giving  constructions  to  the  Constitution  and  laws  of 
the  State 

The.  bill  avers  that  at  the  time  the  tax  complained  of  was  levied, 
there  was  personal  property  in  the  city,  of  the  value  of  from  $300,- 
000  to  $400,000,  liable  to  taxation.  The  demurrer  admits  this  fact. 
The  statute  prescribing  the  property  to  be  taxed,  and  that  to  be 
wholly  exempted  from  taxation,  shows  that  this  personal  property 
must  have  been  taxed  for  other  purposes.  This  tax  was  levied  ex- 
clusively upon  the  real  estate  of  the  City.  That  was  a  discrimina- 
tion in  favor  of  the  personal  property.  It  was  beyond  the  consti- 
tutional power  of  the  Legislature  to  make  any  discrimination.  Prop- 
erty must  be  wholly  exempted  or  not  exempted  at  all.  No  partial 
exemption  or  discrimination  is  permitted.  To  impose  certain  taxes 
exclusively  upon  one  class  of  taxable  property  is  as  much  a  dis- 
crimination as  to  vary  the  rates  of  the  same  or  other  taxes  upon 
different  classes  of  property. 

The  latter  was  attempted  to  be  done,  as  has  been  shown,  in  the 
city  of  Janesville.  The  tax  was  adjudged  to  be  utterly  void. 

The  same  result  must  follow  here. 

A  case  illustrating  more  strongly  than  the  case  before  us,  the 
wisdom  of  the  rule  of  the  Constitution,  as  thus  interpreted,  and 
the  injustice  which  may  be  done  in  departing  from  it,  can  hardly 
be  imagined. 

The  Court  below  erred  in  sustaining  the  demurrer  and  dismissing 
the  bill. 

The  decree  is  reversed,  and  the  cause  remanded  for  further  pro- 
ceedings in  conformity  with  this  opinion. 


MATTER  OF  PELL.  289 


MATTER  OF  PELL. 

Qowrt  of  Appeals  of  New  York.    1902. 
Ill  New  York,  48. 

BARTLETT,  J.  The  testator,  Walden  Pell,  1st,  died,  in  the  city 
of  Xew  York  on  the  fourteenth  day  of  April,  1863,  and  by  the 
terms  of  his  will  he  gave  a  life  estate  in  all  his  property  to  his 
widow,  with  remainders  over  at  her  death  in  equal  shares  (after 
making  various  bequests  of  personal  property)  to  his  nephews  and 
nieces  and  the  issue  of  any  deceased  nephew  or  niece,  together  witti 
one  equal  share  thereof  to  his  sister  Emma.  The  life  tenant,  the 
widow,  died  on  the  twentieth  day  of  December,  1899,  at  which  time 
all  the  estates  in  remainder  came  into  the  actual  possession  and 
enjoyment  of  the  beneficiaries  under  the  will  and  codicil. 

It  is  not  disputed  that  under  this  will  the  bequests  of  personal 
property  and  the  estates  upon  remainder  of  real  estate  vested  in 
the  beneficiaries  at  the  time  of  the  testator's  death. 

Xotwithstanding  the  vesting  of  these  estates  in  the  year  1863, 
it  is  contended  on  behalf  of  the  comptroller  of  the  city  of  New  York 
that  they  are  subject  to  the  payment  of  the  transfer  tax,  under  an 
amendment  of  the  general  statute,  providing  for  taxable  transfers 
(Laws  1899,  ch.  76),  being  article  ten  of  an  act  in  relation  to  tax- 
ation, constituting  chapter  twenty-four  of  the  general  laws  (Chap. 
908  of  the  Laws  of  1896,  pp.  795,  868),  which  reads  as  follows: 

"All  estates  upon  remainder  or  reversion,  which  vested  prior  to 
June  thirtieth,  1885,  but  which  will  not  come  into  actual  posses- 
sion or  enjoyment  of  the  person  or  corporation  beneficially  inter- 
ested therein  until  after  the  passage  of  this  act  shall  be  appraised 
and  taxed  as  soon  as  the  person  or  corporation  beneficially  inter- 
ested therein  shall  be  entitled  to  the  actual  possession  or  enjoyment 
thereof." 

This  amendment  of  1899  became  a  law  on  March  14th  of  that 
year,  the  life  tenant  dying  in  the  following  December. 

It  is  conceded  that  the  remainders  in  this  case  are  controlled  by 
this  amendment  if  it  can  be  sustained  as  a  valid  exercise  of  legis- 
lative power. 

This  court  in  Matter  of  Seaman   (147  X.  Y.  69)   held  that  the 

Taxable  Transfer  Act  of  1892,  which  provided  that  "such  tax  shall 

also  be  imposed  when  any  person  or  corporation  becomes  beneficial ly 

entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 

19 


EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

thereof  by  any  such  transfer,  whether  made  before  or  after  the  pas- 
sage of  this  act,"  was  to  be  restricted  to  the  case  of  grants  or  gifts 
causa  mortis,  mentioned  in  the  preceding  portion  of  the  subdivision, 
and  did  not  extend  to  transfers  by  will  or  intestacy  so  as  to  subject 
to  taxation  rights  of  succession  which  accrued  before  the  statute 
came  into  existence. 

This  court  and  the  Supreme  Court  of  the  United  States  have  held 
in  numerous  cases  that  the  transfer  tax  is  not  imposed  upon  prop- 
erty, but  upon  the  right  of  succession.  It,  therefore  follows  that 
where  there  was  a  complete  vesting  of  a  residuary  estate  before  the 
enactment  of  the  transfer  tax  statute,  it  cannot  be  reached  by  that 
form  of  taxation.  In  the  case  before  us  it  is  an  undisputed  fact 
that  these  remainders  had  vested  in  1863,  and  the  only  contin- 
gency leading  to  their  divesting  was  the  death  of  a  remainderman 
in  the  lifetime  of  the  life  tenant,  in  which  event  the  children  of  the 
one  so  dying  would  be  substituted.  If  these  estates  in  remainder 
were  vested  prior  to  the  enactment  of  the  Transfer  Tax  Act  there 
could  be  in  no  legal  sense  a  transfer  of  the  property  at  the  time  of 
possession  and  enjoyment.  This  being  so,  to  impose  a  tax  based  on 
the  succession  would  be  to  diminish  the  value  of  these  vested  estates, 
to  impair  the  obligation  of  a  contract  and  take  private  property  for 
public  use  without  compensation. 

The  learned  'Appellate  Division  reached  the  conclusion  that  this 
amendment  of  1899  was  unconstitutional,  and  we  agree  with  them 
in  that  regard.  They  have,  however,  sustained  this  legislation  on 
the  ground  that  it  is  a  direct  tax  upon  property  and  a  legitimate 
exercise  of  the  taxing  power.  In  so  holding  that  learned  court  uses 
this  language:  "It  may  seem  incongruous  that  a  transfer  tax  act, 
which  in  principle  was  intended  to  impose  a  tax  upon  the  right  of 
succession,  should  be  construed  in  such  a  way  as  to  uphold  the  tax 
as  one  upon  property.  Our  conclusion,  therefore,  upon  the  whole 
case  is,  that  if  the  tax  sought  to  be  imposed  could  only  be  sup- 
ported upon  the  principle  that  it  is  a  tax  upon  the  right  of  succes- 
sion, then  there  would  be  objections,  among  them  constitutional 
ones,  to  its  validity;  but  that  with  reference  to  the  estate  here  in- 
volved, if  the  act  can  be  construed,  as  with  some  misgivings  we 
think  it  can,  as  a  tax  upon  property,  it  is  free  from  constitutional 
objections,  and  the  tax  may  be  upheld." 

We  are  of  opinion  that  it  is  a  violent  presumption  as  to  the  inten- 
tion of  the  legislature  to  construe  an  act,  which  is  avowedly  de- 


MATTEK  OF  PELL.  291 

signed  to  tax  the  succession  of  property,  on  the  death  of  its  owner, 
as  a  direct  tax. 

It  would  seem  to  be  too  clear  for  argument  that  the  legislative 
intention  in  this  regard  was  to  deal  with  the  act  relating  to  taxa- 
ble transfers  and  nothing  else. 

To  say  that  the  act  was  not  an  amendment  of  the  law  relating  to 
taxable  transfers  of  property  is  to  contradict  what  plainly  appears 
upon  its  face. 

The  intention  of  the  legislature  being  so  absolutely  clear  in  the 
premises,  for  it  must  be  remembered  that  ever  since  the  death  of 
the  testator  this  property  has  borne  and  discharged  its  annual  taxes 
just  the  same  as  other  property,  we  might  well  be  justified  in  de- 
clining to  further  consider  the  question  of  whether  this  is  an  effort 
to  impose  a  direct  tax  upon  property. 

Assuming,  however,  that  the  legislature  intended  to  exercise  its 
power  of  direct  taxation,  the  learned  counsel  for  the  appellant  in- 
gists  that  it  is  invalid  for  two  reasons: 

(1)  The  law  does  not  subject  to  the  tax  a  class  of  property  but 
does  subject  certain  designated  persons,  defined  by  the  character  of 
their  ownership,  to  the  payment  of  the  tax. 

(2)  The  law  does  not  apportion  the  burden  equally  upon  all 
the  owners  designated,  but  discriminates  between  different  owners, 
so  that  the  share  of  the  burden  imposed  as  to  some  owners  is  five 
per  cent,  as  to  other  owners  it  is  one  per  cent,  and  as  to  still  other 
owners  it  is  nothing  at  all. 

It  is  the  undoubted  rule  that  the  legislature  possesses  unlimited 
power  of  taxation  except  as  restrained  by  constitutional  provisions. 
These  restraints  require  the  taxation  to  be  imposed  according  to 
well-settled  general  rules. 

It  is  to  be  observed  that  the  amendment  of  1899,  now  under  con- 
sideration, was  further  amended  in  1900  and  1901  by  changing 
the  words,  "June  30th,  1885,"  to  "May  1st,  1892."  While  these 
changes  do  not  affect  the  case  at  bar,  still  they  indicate  the  legis- 
lative intention  to  narrow  the  application  of  this  statute  to  a  very 
limited  number  of  individuals  belonging  to  a  larger  class.  The 
vice  of  this  legislation  is  that  it  does  not  seek  to  impose  a  tax  on  all 
estates  upon  remainder,  whether  created  by  will  or  deed,  that  vested 
prior  to  June  30th,  1885,  but  contains  the  further  provision  that 


292       EQUALITY  AND  UNIFOKM1TY  IN  TAXATION. 

the  life  estate  must  expire  after  the  passage  of  the  amendment  on 
March  14th,  1899. 

All  the  vested  estates  upon  remainder  or  reversion,  as  to  which 
the  intermediate  life  estate  terminated  between  June  30th,  1885, 
and  March  14th,  1899,  escape  taxation,  as  they  arc  not  within  the 
purview  of  the  amendment  of  the  latter  year.  The  tax  is,  there- 
fore, imposed  upon  a  limited  class  of  remaindermen,  while  others 
who  have  come  into  possession  and  enjoyment,  by  reason  of  the  ter- 
mination of  the  life  estate  long  after  the  early  date  fixed  of  June 
30th,  1885,  are  not  taxed. 

The  learned  counsel  for  appellant  states  a  very  apt  illustration 
in  his  brief,  as  follows :  "We  often  hear  it  declared  that  the  legis- 
lature may  designate  watches  and  carriages  as  a  class  of  property 
and  subject  the  same  to  the  payment  of  duties  or  taxes,  but  would 
any  one  claim  that  a  law,  declaring  that  all  watches  or  carriages 
which  were  purchased  prior  to  June  30th,  1885,  should  be  ap- 
praised and  taxed,  could  be  sustained  upon  the  ground  that  such 
law  merely  designated  a  class  of  propertj7  for  taxation?" 

Where  the  statute  declares  that  the  owners  of  a  particular  class 
of  property,  acquired  at  a  particular  time,  shall  be  taxed,  it  is 
equivalent  to  naming  the  owners  of  such  property;  it  is  in  no  sense 
a  general  classification. 

This  amendment  is  clearly  unconstitutional  in  another  aspect,  as 
it  does  not  apportion  the  burden  equally  among  the  owners  of  es- 
tates sought  to  be  taxed,  for  it  imposes  on  some  five  per  cent,  on 
others  one  per  cent,  and  as  to  other  owners  nothing  at  all.  It  is 
true  this  discrimination  was  brought  about  because  the  legis- 
lature was  dealing  with  a  succession  tax,  and,  consequently,  main- 
tained the  differing  rates  of  taxation  found  in  the  act  in  relation 
to  taxable  transfers.  This  is  still  further  evidence  that  the  inten- 
tion of  the  legislature  was  not  to  exercise  its  power  of  direct  taxa- 
tion. 

It  follows  that  the  amendment  of  1899,  whether  regarded  as  a 
part  of  the  act  relating  to  taxable  transfers,  or  an  attempt  on  the 
part  of  the  legislature  to  exercise  its  general  power  of  taxation,  is 
unconstitutional  and  void. 

The  order  appealed  from  should  he  reversed,  with  costs,  and  an 
order  duly  entered  declaring  the  estate  of  Walden  Pell,  1st,  to  be 
exempt  from  the  transfer  tax. 

GRAY,  O'BRIEN,  CULLEN  and  WERNER,  JJ.,  concur;  PARKER, 
Ch.J.,  concurs  only  on  the  ground  that  chapter  76,  Laws  of  1899, 


SUPERVISORS  V.  C.,  B.  &  Q.  R,  R.  CO.  293 

does  not  provide  for  a  direct  tax  upon  property  and  in  so  far  as  it 
aims  to  tax  transfers  of  estates  already  vested  when  the  act  was 
passed   (which  is  this  case),  it  is  void. 
Order  reversed,  etc. 

It  had  been  held  prior  to  the  amendment  of  1899  that  the  transfer  in  the 
case  of  a  remainderman  took  place  at  the  time  of  the  death  of  the  decedent. 
Matter  of  Harbeck,  161  N.  Y.  211. 

See  for  the  rule  applied  to  the  exercise  of  a  power  of  appointment,  Orr  v. 
Oilman,  183  U.  S.  278,  supra. 


SUPERVISORS  V.  C.,  B.  &  Q.  R.  R.  CO. 

Supreme  Court  of  Illinois.     April,  1867. 
44  Illinois  229. 

Mr.  Justice  BREESE  delivered  the  opinion  of  the  Court. 

The  power  of  the  legislature  to  impose  taxes  is  expressly  granted 
by  the  Constitution,  and  is  found  in  the  following  provisions  of 
that  instrument.  They  are  just,  wise  and  simple.  Section  2,  arti- 
cle 9,  requires  the  general  assembly  to  provide  for  levying  a  tax  by 
valuation,  so  that  every  person  and  corporation  shall  pay  a  tax  in 
proportion  to  the  value  of  his  or  her  property ;  such  value  to  be  as- 
certained by  some  person  or  persons  to  be  elected  or  appointed  in 
such  manner  as  the  general  assembly  shall  direct,  and  not  other- 
wise. Section  5  of  the  same  article  provides,  that  the  corporate 
authorities  of  counties,  townships,  school  districts,  cities,  towns  ami 
villages  may  be  vested  with  power  to  assess  and  collect  taxes  for 
corporate  purposes;  such  taxes  to  be  uniform  in  respect  to  persons 
and  property  within  the  jurisdiction  of  the  body  imposing  the  same. 

In  the  exercise  of  this  grant  of  powers,  several  laws  have  been 
passed  by  the  general  assembly 

By  the  act  of  February  14,  1855,  a  discrimination  is  made  in  re- 
gard to  the  property  of  railroad  companies.  They  are  required,  by 
section  4,  of  that  act,  to  set  forth  in  their  schedules,  or  lists  of  tax- 
able property,  a  description  of  all  the  real  property  owned  or  occu- 
pied by  the  company  in  each  county,  town  and  city  through  which 
their  railroad  may  run,  and  the  actual  value  of  each  lot  or  parcel 
of  land,  including  the  improvements  thereon  (except  the  track  or 
superstructure  of  the  road),  must  be  annexed  to  the  description  of 


294      EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

each  lot  or  parcel  of  land.  This  list  must  set  forth  the  number  of 
acres  taken  for  right  of  way,  stations,  or  other  purposes,  from  each 
tract  of  land  through  which  the  road  may  run,  describing  the  land 
as  near  as  practicable  in  accordance  with  the  United  States  surveys, . 
giving  the  width  of  the  strip  or  parcel  of  land,  and  its  length 
through  each  tract;  also,  the  whole  number  of  acres  and  the  aggre- 
gate value  thereof  in  such  county,  town  and  city.  All  this  is  de- 
nominated real  property,  and  such  list  must  set  forth  the  length  of 
the  main  track  and  the  length  of  all  side  tracks  and  turn-outs  in 
each  county,  etc.,  through  which  the  road  runs,  with  the  actual 
value  of  the  same,  and  the  value  of  the  improvements  at  each  of 
the  several  stations,  where  such  stations  are  not  a  part  of  the  city 
or  town  lots.  This  track  and  these  stations  are  denominated  "fixed 
and  stationary  personal  property." 

This  list  must  also  contain  an  inventory  of  the  rolling  stock  be- 
longing to  the  company  with  the  value  thereof.  This  rolling  stock 
is  denominated  personal  property.  The  list  must  also  contain  a 
statement  of  the  value  of  all  other  personal  property  owned  by  the 
company,  and  must  also  state  the  length  of  the  whole  main  track 
within  the  State  and  the  total  value  of  the  rolling  stock,  which  roll- 
ing stock  is  taxed  in  the  several  counties,  towns  and  cities  pro  raia, 
in  the  proportion  the  length  of  the  main  track  in  such  county,  town 
or  city  bears  to  the  whole  length  of  the  road;  all  other  property 
must  be  listed  and  taxed  in  the  county,  town  or  city  where  the  same 
is  located  or  used.  This  section  then  proceeds  to  define  the  descrip- 
tion of  all  lands  owned  by  any  railroad  company  for  right  of  way 
or  station  purposes  other  than  those  which  are  a  part  of  a  laid  oft* 
town,  city  or  village,  under  which  it  shall  be  entered  by  the  asses- 
sor in  his  books.  Scates'  Comp.  1166. 

The  second  section  provides,  that  this  list  or  schedule  of  taxable 
property  belonging  to  a  railroad  company  shall  be  made  to  the  coun- 
ty clerk,  instead  of  the  assessor,  and  the  clerk  is  required  to  lay 
ithe  same  before  the  board  of  supervisors  when  they  meet  to  equal- 
ize the  assessment  of  property. 

If  a  majority  of  this  board  are  satisfied  that  the  schedule  is  cor- 
rect, they  are  required  to  assess  the  property  according  to  it;  but 
jf  they  believe  such  schedule  does  not  contain  a  full  and  fair  state- 
ment of  the  property  of  the  company  subject  to  taxation  in  such 
county,  made  out  and  valued  in  accordance  with  the  requirements  of 
the  law,  the  board  is  authorized  to  assess,  or  cause  it  to  be  assessed, 
in  accordance  with  the  rules  prescribed  for  assessing  such  property. 
Scates'  Comp.  1105. 


SUPERVISORS  V.  C.,  B.  &  Q.  R.  R.  CO.  295 

The  appellees,  in  the  attempted  performance  of  the  duty  enjoined 
on  them  by  these  statutes,  presented  their  list,  or  schedule  of  their 
taxable  property,  for  1863,  owned  by  them  in  Bureau  county,  to  the 
clerk  of  the  County  Court,  in  all  respects,  as  alleged  by  them,  in 
strict  compliance  with  the  statute;  which  the  clerk  laid  before  the 
board  of  supervisors  when  they  met  to  equalize  the  assessments  in 
that  county.  This  schedule  presented  an  aggregate  valuation  of 
$282,383  27-100  of  their  property  owned  in  Bureau  county,  which, 
by  the  action  of  the  board  was  increased  to  $395,336  57-100,  being 
forty  per  cent  above  the  valuation  by  the  company. 

Availing  of  the  act  of  1861,  by  which  an  appeal  is  allowed  to  the 
Circuit  Court  from  the  action  of  the  board  of  supervisors,  the  com- 
pany took  an  appeal  to  the  Circuit  Court  of  Bureau  county,  and,  by 
change  of  venue,  the  cause  was  transferred  to  La  Salle  county,  in 
the  Circuit  Court  of  which  county,  at  the  March  Term,  1866,  such 
proceedings  were  had  as  resulted  in  a  deduction  by  that  court  of  the 
per  cent  thus  imposed  by  the  board  of  supervisors,  leaving  the  sched- 
ule of  the  company  as  originally  presented  to  the  county  clerk  in- 
tact. 

To  reverse  this  judgment,  the  county  of  Bureau  bring  the  case 
here  by  appeal,  and  assign  various  errors,  which  we  have  fully  con- 
sidered  

For  the  appellees,  the  court  instructed  the  jury,  if  the  company 
valued  their  property  in  their  schedule  or  return,  so  that  it  bore  a 
just  relation  to  other  property  in  the  county,  then  the  board  of. 
supervisors  had  not  power  to  increase  the  valuation,  and  they  should 
find  for  the  company;  and,  further,  if  the  jury  believed  that  the 
addition  of  forty  per  cent  to  the  aggregate  valuation  returned  by 
the  company  so  increased  the  valuation  that  it  bore  an  undue  pro- 
portion of  the  taxes  of  the  county,  then  such  an  increase  was  un- 
warranted by  law,  and  the  jury  would  be  authorized  to  reduce  the 
assessment,  so  that  it  would  bear  a  proper  proportion  to  such  taxes, 
but  they  could  not  reduce  it  below  the  valuation  fixed  upon  it  by 
the  company.  Appellants  asked  instructions  directly  opposite  to 
those  given  for  appellees,  which  were  refused  by  the  court. 

The  instructions  so  given  announce  principles  so  congenial  to 
justice,  and  so  consonant  with  the  principles  of  equity,  and  so  rea- 
sonable, as  to  challenge  the  approbation  of  all  right-minded  men, 
and  they  ought  to  be  sustained  if  they  are  in  accordance  with  the 
law  under  which  the  proceedings  were  had.  This,  then,  becomes  the 
main  point  of  inquiry.. 

It  is  insisted  by  appellees,  that  their  property,  by  this  addition  of 


296      EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

forty  per  cent  on  its  valuation,  as  returned  by  them  to  the  county 
clerk,  placed  on  it  by  the  board  of  supervisors,  has  the  effect  to 
cause  them  to  pay  a  greater  proportion  of  the  revenue  than  is  de- 
manded of  individuals  listing  their  property  for  taxation  in  the 
same  county.  If  this  be  so,  no  just  mind,  with  the  Constitution  of 
the  State  before  him,  could  sanction  the  proceeding.  The  great 
central  and  dominant  idea  in  that  instrument  is,  uniformity  of  tax- 
ation; and  no  power  exists,  or  should  exist,  in  any  corporate  author- 
ity to  go  counter  to  this  command  of  the  fundamental  law.  A  mode 
has  been  furnished  by  law  by  which  this  uniformity  shall  be  at- 
tained; and  that  is,  that  property  shall  be  assessed  at  its  actual 
value,  and  the  rate  of  taxation  placed  upon  it  shall  be  the  same  re- 
gardless of  persons  or  ownership.  Persons  are  elected  to  ascertain 
this  value,  and  the  rate  is  prescribed. 

It  sufficiently  appears,  that  the  schedule  returned  by  the  appel- 
lees to  the  clerk  of  the  County  Court,  fixed  the  value  of  the  prop- 
erty owned  by  them  in  Bureau  county  on  the  same,  or  on  a  more 
liberal  basis,  than  the  several  assessors  in  the  various  towns  fixed 
upon  the  property  of  individuals  in  the  same  county,  though  in 
neither  case  was  the  property  valued  at  anything  near  its  actual 
cash  value.  For  instance,  while  the  valuation  of  the  property  of 
individuals  ranged  from  one-fifth  to  one-third  of  its  cash  value, 
that  of  the  appellees  ranged  from  one-third  to  one-half  of  its  actual 
value. 

The  requirements  of  the  law  that  each  separate  parcel  of  property 
shall  be  valued  at  its  true  value  in  money,  though  simple  as  a  prop- 
osition, is  not  always  easy  to  obey;  nor  is  that  requiring  personal 
property  to  be  valued  at  the  usual  selling  price  of  similar  property 
at  the  time  of  listing.  So  many  elements  enter  into  the  price  of  an 
article,  even  one  in  common  use,  that  it  is  difficult  to  put  a  selling 
price  upon  it.  Upon  railroad  property  it  is  still  more  difficult,  as 
their  personal  property  has  no  market  value.  Their  property  is  sm 
generis,  not  affected  by  the  principles  of  supply  and  demand,  and  is, 
for  the  most  part,  unsalable  except  in  emergencies,  when  competing 
lines  may  need  rolling  stock  or  other  portions  of  their  equipments. 
It  cannot  be  affirmed  of  a  railroad  in  running  condition,  that  its 
properties  are  marketable.  What  they  cost  is  no  evidence  of  their 
real  value;  nor  do  we  know  of  any  means  an  assessor  or  a  board 
of  supervisors  may  have  at  command  by  which  to  determine  pre- 
cisely the  true  value  of  their  most  valuable  property.  Their  lands 
can  be  valued  with  the  same,  but  with  no  greater  facility  than  sim- 
ilar property  of  individuals;  but  the  value  of  their  track,  and  super- 


SUPERVISORS  V.  C.,  B.  &  Q.  R.  R.  CO.  297 

structure,  and  rolling  stock  depends  so  much  on  contingencies  that 
it  seems  almost  impossible  to  fix  its  real  value.  But,  assuming  the 
values  to  be  as  fixed  by  the  witnesses  examined  on  this  point,  tb.2 
return  made  by  appellees  shows  that  the  valuation  they  fixed  upon 
it,  was  from  one-third  to  one-half  of  its  appraised  value.  But  we 
do  not  intend  to  go  into  the  minutiae,  but  to  announce  simply  the 
principles  we  recognize  as  legal  and  just,  which  should  govern  the 
whole  subject.  The  question  is  before  us  in  all  its  length  and 
breadth :  Can  a  railroad  company,  by  any  action  of  the  corporate 
authorities  of  a  county,  be  required  to  pay  more  than  its  fair  share 
of  taxes  as  compared  with  those  paid  by  individuals?  Does  the 
power  exist  anywhere  to  destroy  the  cardinal  principle  of  uniformity 
of  taxation  so  forcibly  and  prominently  insisted  upon  by  the  Consti- 
tution? This  is  a  great  question,  affecting,  not  only  railroad  cor- 
porations, but  every  property  owner  and  tax  payer  in  the  State. 

It  seems  to  us  there  is  something  so  monstrous  in  the  proposi- 
tion as  to  be  indefensible  by  fair  argument. 

Regarding  uniformity  as  the  vital  principle,  the  dominant  idea 
of  the  Constitution,  where  can  the  power  reside  to  produce  its  op- 
posite? Where  is  the  power  lodged,  in  view  of  this  principle,  to 
compel  A  to  pay,  on  his  land  or  personal  property,  of  no  more 
value  than  the  same  kind  of  property  belonging  to  B,  forty  per  cent 
more  taxes  than  are  assessed  against  B?  We  affirm  such  a  power 
nowhere  exists,  and  if  it  did  it  would  be  so  revolting  in  its  exer- 
cise to  the  lowest  sense  of  justice  with  which  our  species  is  imbued 
as  to  justify  any  and  every  lawful  expedient  for  relief  against  it. 

The  framers  of  our  Constitution  and  our  lawmakers,  to  their 
credit  be  it  said,  have  kept  steadily  in  view  the  principles  of  equal- 
ity and  justice,  in  adopting  a  system  of  taxation  which  commends 
itself  to  the  favor  and  approbation  of  all  well  organized  minds. 

It  is  no  argument  to  urge  that  the  fault  is  with  the  assessors  in 
the  case  of  individuals,  and  with  the  railroad  companies  in  making 
out  their  schedules  for  the  county  clerk.  If  the  assessors  violate 
their  duty,  are  railroad  companies  to  be  the  sufferers  ?  If  they 
neglect  to  act  fully  up  to  all  the  requirements  of  the  law,  is  that 
any  reason  why  A  should  pay  forty  per  cent  more  taxes,  in  propor- 
tion to  value,  than  B? 

The  rule  adopted  by  the  assessors  in  this  State  has  grown  into  a 
custom,  and  has  been  tacitly  sanctioned  by  every  department  of  the 
government  for  a  long  course  of  years,  and  it  is  now  too  late  to 
challenge  it.  Even  so  late  as  the  last  special  session  of  the  legis- 
lature, that  body,  by  clear  implication,  acknowledged  the  custom 


298      EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

and  yielded  to  its  influence,  by  the  provisions  of  the  act  to  tax  the 
shares  in  national  banks.  They  therein  impliedly  declare  that  such 
shares  are  to  be  taxed  the  same  as  other  property.  A  share  of  bank 
stock,  under  that  bill,  is  not  required  to  pay  more  State  or  local 
taxes  than  a  piece  of  land,  or  a  house,  of  equal  value;  and  the  plain 
inference  is,  if  such  property  be  assessed  on  only  one-third  of  its 
actual  value,  bank  stock  shall  be  assessed  on  the  same  per  cent  of 
its  actual  value.  Would  not  the  sense  of  justice  of  every  man  in 
this  community  be  outraged  by  allowing  this  or  any  other  deprecia- 
tion to  one  class  of  people,  and  demanding  of  another  a  higher  tux 
on  a  similar  article  of  the  same  actual  value?  The  proposition  can- 
not commend  itself  to  the  favor  of  any  just  man,  and  can  receive 
no  countenance  in  a  court  of  justice. 

It  is  admitted  as  a  fact  on  both  sides  of  this  controversy,  that  the 
property  of  no  one  owner  in  the  county  of  Bureau  has  been  taxed 
on  its  real  value,  and  that  the  per  cent  added  by  the  board  of  super- 
visors to  the  valuation  of  the  property  of  appellees  imposes  on  them 
a  greater  proportionate  burden  than  the  law  requires  them  to  bear. 
We  are  of  this  •  opinion,  and  therefore  consider  the  action  of  the 
board  unfounded  in  justice,  and  in  direct  opposition  to  the  Consti- 
tution. The  great  and  attractive  feature  of  uniformity  has  been 
disregarded  by  the  board,  and  appellees  victimized.  It  may  be  very 
desirable,  that  the  greatest  share  of  the  public  burdens  shall  be 
borne  by  these  corporations,  but  until  there  is  a  radical  change  in 
our  fundamental  law  it  cannot  be  done.  They  stand  on  the  plat- 
form of  equality  before  the  law,  and  no  greater  burden  for  the  sup- 
port of  government  can  be  imposed  upon  them  than  can  be  placed 
on  the  individual  tax  payer. 

Entertaining  these  views,  we  must  affirm  the  judgment  of  the 
La  Salle  Circuit  Court.  The  action  of  the  board  of  supervisors  of 
Bureau  county  was  ultra  vires,  and  cannot  be  sanctioned  by  this 
court. 

Judgment  affirmed. 

WALKER,  Ch.  J.,  dissenting. 


CALIFORNIA  V.  McCREERY.  299 

II.     POWER  OF  EXEMPTION. 
CALIFORNIA  V.  McCREERY. 

Supreme  Court  of  California.     January,  1868. 
34  California  482. 

By  the  Court,  RHODES,  J. : 

Another  question,  and  one  of  much  greater  importance  under  our 
present  revenue  system,  does  arise  in  this  case.  The  defendant  ob- 
jects to  the  tax  on  the  ground  "that  the  Legislature  having,  in 
defiance  of  constitutional  requirements,  imposed  the  burden  of  tax- 
ation upon  a  portion  only  of  the  property  in  the  State,  and  ex- 
pressly relieved  a  large  portion  from  taxation,  the  law  is  neither 
equal  nor  uniform  in  its  operation,  does  not  tax  'all  the  property 
in  the  state,'  and  is  therefore  void." 

The  section  of  the  constitution  referred  to  is  section  thirteen  of 
Article  Eleven,  and  is  as  follows: 

"Taxation  shall  be  equal  and  uniform  throughout  the  State.  All 
property  in  this  State  shall  be  taxed  in  proportion  to  its  value,  to 
be  ascertained  as  directed  by  law;  but  Assessors  and  Collectors  of 
town,  county  and  State  taxes  shall  be  elected  by  qualified  electors  of 
the  district,  county  or  town  in  which  the  property  taxed  for  State, 
county  or  town  purposes  is  situated/' 

Construction  or  interpretation  can  scarcely  make  the  meaning  of 
the  words  more  apparent,  for  there  is  no  word  in  the  clause  of  am- 
biguous or  doubtful  import.  The  meaning  of  taxation  must  be  kepf 
in  view,  and  that  is:  a  charge  levied  by  the  sovereign  power  upon 
the  property  of  its  subject.  It  is  not  a  charge  upon  its  own  prop- 
erty, nor  upon  the  property  over  which  it  has  no  dominion.  This 
excludes  the  property  of  the  State,  whether  lands,  revenues  or  other 
property,  and  the  property  of  the  United  States.  That  "all  prop- 
erty in  this  State"  does  not  mean  either  all  that  the  Legislature  may 
designate,  or  all  except  such  as  the  Legislature  may  exempt,  is  as  self 
evident  as  the  axiom  that  the  "whole  is  greater  than  a  part."  No 
process  of  reasoning  or  demonstration  can  make  it  plainer. 

It  is  provided  by  the  second  section  of  the  General  Revenue  Act 
of  1857,  as  amended  in  1859,  (Stats.  1859,  p.  343),  that  "all  prop- 
erty of  every  kind  and  nature  whatever  within  this  State  shall  be 
subject  to  taxation,  except"  certain  property  therein  specified.  After 


300      EQUALITY  AND  UNIFOKMITY  IN  TAXATION. 

mentioning  the  property  of  the  State,  the  counties  and  municipal 
corporations,  and  of  the  United  States,  the  section  enumerates  col- 
leges, school  houses  and  other  huildings  for  the  purpose  of  educa- 
tion, public  hospitals,  asylums,  poor  houses  and  other  charitable  in- 
stitutions for  the  relief  of  the  indigent  and  afflicted,  churches,  chap- 
els and  other  buildings  for  religious  worship,  together  with  lots  of 
ground  and  other  property  appurtenant  thereto;  cemeteries  and 
graveyards;  the  property  of  widows  and  orphan  children  to  the 
amount  of  one  thousand  dollars;  growing  crops  and  mining  claims. 
If  the  power  exists  in  the  Legislature  to  exempt  growing  crops, 
mining  claims  and  other  property  mentioned,  the  exemption  may 
be  carried  still  further,  until  property  of  one  class  is  made  to  bear 
the  whole  burden  of  taxation.  The  exemption,  so  far  as  it  includes 
private  property,  is  in  plain  violation  of  the  command  of  the  Con- 
stitution. 


All  property  of  the  state  and  municipalities  held  for  governmental  purposes 
is  impliedly  exempted  from  taxation.  Louisville  v.  Com.,  1  Duv.  295 ;  Roches- 
ter v.  Rush,  80  N.  Y.  302 ;  Industrial  University  v.  Champaign  Co.,  76  111.  283. 
There  is  some  doubt  as  to  property  held  in  a  private  capacity  by  municipali- 
ties. Louisville  v.  Commonwealth,  1  Duv.  295. 

In  the  absence  of  a  constitutional  prohibition  the  legislature  may  exempt 
property  and  persons  from  taxation.  This  results  from  the  power  the  legis- 
lature has  to  select  the  objects  of  taxation  and  the  application  of  the  rule  that 
nothing  not  selected  for  that  purpose  by  the  legislature  is  taxable.  See  Simp- 
son v.  Hopkins,  82  Md.  478.  This  case  upheld  a  law  which,  while  taxing  mort- 
gages of  a  corporation  held  by  a  resident  on  property  subject  to  its  jurisdic- 
tion, exempted  non-interest  bearing  bonds  and  mortgages  of  individuals  and 
building  associations.  But  see  Russell  v.  Curry,  164  Mo.  69,  which  holds 
this  violative  of  14th  amendment. 

As  to  the  effect  on  the  validity  of  a  tax  of  the  omission  of  taxable 
property  from  the  assessment  roll,  see  People  v.  Platt,  24  N.  J.  L.  108,  infra. 


PEOPLE  EX  EEL.  MEDICAL  COLLEGE  V.  CAMPBELL. 

Court  of  Appeals  of  New  York.     October,  1883. 
93  New  York,  196. 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court, 
in  the  first  judicial  department,  made  January  17,  1883,  which 
affirmed  an  order  of  Special  Term,  directing  the  issuing  of  a  per- 
emptory writ  of  mandamus,  requiring  defendant,  as  comptroller  of 


MEDICAL  COLLEGE  V.  CAMPBELL.  301 

the  city  of  New  York,  to  cancel  of  record  certain  taxes  imposed  in 
1881,  upon  lots  in  said  city,  leased  by  relator  under  an  agreement 
that  it  should  pay  or  procure  the  taxes  thereon  to  be  remitted. 

The  real  estate  was  occupied  and  used  as  a  medical  college,  hos- 
pital and  free  dispensary  for  women.  The  lots  were  assessed,  for 
the  year  in  question,  to  the  owner,  and  the  tax  in  question  levied 
October  13,  1881.  In  November,  1881,  the  relator  petitioned  the 
department  of  taxes  and  assessments  to  have  the  property  exempted. 
The  commissioners  signed  and  sent  to  the  comptroller  a  certificate 
to  the  effect  that  they  thereby  exempted  said  property  from  taxa- 
tion for  the  year  1881. 

DANTORTH,  J.  We  are  of  opinion  that  the  case  made  by  the  re- 
lator does  not  bring  the  property  in  question  within  any  provision 
of  the  statute  allowing  exemption  from  taxation.  It  is  neither  a 
building  for  public  worship,  nor  in  any  sense  the  property  of  a 
religious  society.  Upon  this  point  we  agree  with  the  court  below. 
Neither  is  it  exclusively  used  as  a  seminary  of  learning,  nor  is  it  the 
property  of  the  New  York  Public  .School  Society,  and  unless  one  or 
the  other  of  these  conditions  attach,  both  building  and  premises  re- 
main liable  to  bear  a  just  proportion  of  the  public  burden  (Laws 
of  1852,  chap.  282;  1  R.  S.  31,  chap.  13,  tit.  1,  §  4,  subd.  3.)  until 
relieved  therefrom  in  some  legal  manner.  The  respondent  claims 
that  this  result  was  reached  when  the  department  of  taxes  and  as- 
sessments decided  that  the  property  should  be  exempt  from  taxation 
for  the  year  1881,  and  the  serious  question  before  us  is  whether 
there  is  authority  for  that  conclusion 

It  is  apparent  from  these  provisions  that  under  them  no  tax 
could  lawfully  be  remitted  except  for  cause,  or  property  declared 
exempt  from  taxation  at  the  arbitrary  discretion  of  any  of  the  offi- 
cers intrusted  at  different  times  with  the  administration  of  muni- 
cipal affairs.  Excessive  valuation  might  be  reduced,  and  property 
exempt  by  law  stricken  from  the  roll,  notwithstanding  its  owner's 
delay  in  applying  for  relief,  but  the  statute  must  in  all  cases  furnish 
the  ground  for  exemption.  Xone  of  these  provisions  have  been  re- 
pealed, and  we  discover  no  intent  on  the  part  of  the  legislature  by 
the  act  in  question  (Laws  of  1870,  chap.  382,  §  8,  supra)  to  dele- 
gate to  the  commissioners  the  power  of  exempting  property  from  tax- 
ation, nor  when  we  consider  it  in  connection  with  other  statutes,  can 
we  conclude  that  they  had  any  other  object  in  view  by  its  enact- 
ment than  the  substitution  of  the  commissioners,  and  the  exercise  by 
them  of  powers,  theretofore  vested  in  the  board  of  supervisors. 

The   certificate  of  the  commissioners,   therefore,   was  not  author- 


302       EQUALITY  AND  UNIFORMITY  IN  TAXATION. 

ized  by  law,  and  the  relator  was  not  entitled  to  a  mandamus.  The 
orders  of  the  Special  and  General  Terms  should  be  reversed,  and 
motion  for  mandamus  denied  with  costs,  and  costs  of  this  appeal. 

All  concur. 

Ordered   accordingly. 


IN     THE     MATTER     OF     THE     APPLICATION     OF     THE 

MAYOR  &  C.  OF  NEW  YORK  FOR  ENLARGING  AND 

IMPROVING  NASSAU   STREET. 

Supreme   Court  of  New   York.     January,  1814. 
11  Johnson  77. 

The  commissioners  appointed  by  the  court,  on  the  application  of 
the  corporation  of  the  city  of  New  York,  pursuant  to  the  17  8th  sec- 
tion of  the  act  "to  reduce  several  laws  relating  particularly  to  the 
city  of  New  York  into  one  act,"  passed  9th  April,  1813,  (2  N.  R. 
L.  408)  made  a  report  of  their  estimate  and  assessment  of  the  dam- 
age and  benefit  to  the  parties  interested,  &c.,  in  enlarging  part  of 
Nassau  street,  by  which,  among  other  things,  it  appeared  that  they 
assessed  the  benefit  of  the  proposed  improvement  to  the  following 
churches,  to  be  paid  by  them,  viz.  on  the  French  church  Du  St. 
Esprit,  1,273  dollars,  the  Presbyterian  church  in  Wall  Street,  1,981 
dollars  and  81  cents,  and  the  Scotch  Presbyterian  church,  in  Cedar 
Street,  410  dollars.  To  this  assessment  the  several  churches  stated 
their  objections  in  writing  to  the  commissioners.  Several  individ- 
uals, also,  owners  of  houses  and  lots  assessed,  stated  their  objections 
to  the  report,  on  the  ground  of  the  assessment  being  inequitable  and 
disproportionate.  A  motion  having  been  made  at  the  last  term  to 
have  the  report  of  the  commissioners  confirmed,  the  churches,  by 
their  counsel,  as  well  as  the  individual  proprietors,  were  heard  in 
support  of  their  objections. 

Per  Curiam.  The  churches  are  not  well  founded  in  their  claim 
to  a  total  exemption  of  their  lots  from  assessments  for  opening,  en- 
larging, or  otherwise  improving,  streets  in  the  city  of  New  York, 
made  in  pursuance  of  the  act  of  the  9th  of  April,  1813.  (2  N.  R.  L. 
408.)  These  assessments  are  intended  and  directed  to  be  made 
upon  the  owners  of  lands  and  lots  who  may  receive  "benefits  and 
advantage"  by  the  improvement.  The  exemption  granted  by  the 
act  of  1801,  was  in  the  general  act  for  the  assessment  and  collection 


IN  THE  MATTER  OF  NEW  YORK.  303 

of  taxes;  (1  N.  R.  L.  556.)  (a)  and  the  provisions  of  that  act  all 
refer  to  the  general  and  public  taxes  to  be  assessed  and  collected  for 
the  benefit  of  the  town,  county,  or  State  at  large.  The  words  of 
the  exemption  are,  that  no  church  or  place  of  public  worship,  nor 
any  school-house,  &c.,  "should  be  taxed  by  any  law  of  this  state." 
The  word  "taxes"  means  burdens,  charges,  or  impositions,  put  or  set 
upon  persons  or  property  for  public  uses,  and  this  is  the  definition 
which  Lord  Coke  gives  to  the  word  talliage  (2  Inst.  532.)  and  Lord 
Holt,  in  Garth.  438,  gives  the  same  definition,  in  substance,  of  the 
word  tax.  The  legislature  intended  by  that  exemption  to  relieve 
religious  and  literary  institutions  from  these  public  burdens,  and 
the  same  exemption  was  extended  to  the  real  estate  of  any  minister, 
'  not  exceeding  in  value  1,500  dollars.  But  to  pay  for  the  opening  of 
a  street,  in  a  ratio  to  the  "benefit  or  advantage"  derived  from  it,  is 
no  burden.  It  is  no  talliage  or  tax  within  the  meaning  of  the  ex- 
emption, and  has  no  claim  upon  the  public  benevolence.  Why  should 
not  the  real  estate  of  a  minister,  as  well  as  of  other  persons,  pay 
for  such  an  improvement  in  proportion  as  it  is  benefited?  There  is 
no  inconvenience  or  hardship  in  it,  and  the  maxim  of  law  that  qui 
sentit  commodum  debet  sentire  onus,  is  perfectly  consistent  with  the 
interests  and  dictates  of  science  and  religion.  The  legislature  have, 
in  several  instances,  given  this  construction  to  the  exemption  in 
question  by  recognizing  as  valid,  similar  assessments  upon  public 
property  in  New  York.  (Acts,  sess.  34  c.  246,  s.  30.  Sess.  35,  c. 
239,  s.  43.) 

Motion  denied. 

As  a  general  thing  it  is  held  that  a  provision  in  a  state  constitution  re- 
quiring equality  and  uniformity  of  taxation  is  applicable  only  to  property 
taxes.  People  v.  Coleman,  4  Cal.  46,  supra;  Newton  v.  Atchinson,  31  Kan.  151, 
infra.  But  some  cases  hold  that  such  a  provision  makes  impossible  progressive 
inheritance  taxes.  State  v.  Ferris,  53  Ohio  State,  314;  State  v.  Switzler,  143 
Mo.  287,  and  some  go  so  far  as  to  hold  that  all  inheritance  taxes  are  violative 
of  a  uniformity  provision.  Curry  v.  Spencer,  61  N.  H.  624. 


CHAPTER  VII. 

OFFICIAL  ACTION  IN  MATTERS  OF  TAXATION. 

SMITH  V.  MESSER. 

Superior  Court  of  Judicature  of  New  Hampshire.     181$. 
17  New  Hampshire  J+20. 

Writ  of  Entry.  John  Smith,  the  late  husband  of  the  plaintiff, 
conveyed  to  the  Manufacturers'  and  Mechanics'  Bank,  a  corporation 
in  Massachusetts,  the  James  Hugh  farm,  so  called,  in  Colebrook,  a 
part  of  which  farm  is  demanded  in  this  suit 

A  part  of  the  farm  was  assigned  to  the  plaintiff  as  her  right  of 
dower. And  she  went  into  possession  under  the  as- 
signment, and  so  remained  until  divested  by  the  defendant. 

The  plea  is  the  general  issue. 

The  defendant  claimed  title  by  virtue  of  a  deed  from  a  collector 
of  taxes  under  his  sale.  .  .  . 

The  plaintiff  takes  the  following  ...  .  exceptions  to  the 
validity  of  the  sale: 

15.  That  Hutchinson  was  not  legally  collector  of  taxes  for  the 
year  1842,  because  he  did  not  give  a  bond,  with  sureties,  to  the 
town  within  six  days  of  his  choice,  or  at  any  time. 

GILCHRIST,  J. 

It  sufficiently  appears  that  Hntchinson  was  de  facto  collector,  ex- 
ercising the  functions  of  that  office  under  color  of  an  election;  and 
it  was  held  in  Tucker  v.  Ailcen,  7  N.  H.  Rep.  113,  that  the  acts  of 
an  officer  de  facto  are  in  general  valid,  so  far  as  the  rights  of  third 
parties  are  concerned;  and  that  the  regularity  of  his  appointment  is 
not  to  be  collaterally  inquired  into  in  proceedings  to  which  he  is  not 
a  party.  The  case  of  Cardigan  v.  Page,  6  N.  H.  Rep.  182,  is  there 
adverted  to,  and  the  doctrine  which  it  seems  to  establish  declared 
to  be  untenable.  The  giving  of  bonds,  or  the  contrary  undoubtedly 
would  have  affected  the  tenure  of  his  office,  had  proper  measures 

304 


SNELL  V.  FOKT  DODGE  ET  AL.        305 

been  instituted  for  the  purpose  of  testing  its  validity,  but  has  no 
bearing  upon  the  fact  that  he  was  in  the  open  exercise  of  the  func- 
tions appertaining  to  the  office,  and  was  collector  in  fact. 


SNELL  V.  THE  CITY  OF  FORT  DODGE  ET  AL. 

Supreme  Court  of  Iowa.    June,  1877. 
45  Iowa  5G4. 

Action  in  equity  to  restrain  the  collection  of  city  taxes  on  certain 
real  property  belonging  to  the  plaintiff,  situate  within  the  corporate 
limits  of  the  defendant,  on  the  grounds,  as  stated  in  the  petition: 

3.     That  the  county  auditor  on  his  own  motion  and 

without  authority  of  law  placed  said  levy  on  the  tax  lists  and  deter- 
mined the  tax  upon  said  property  from  the  valuation  of  the  town- 
ship assessor,  made  in  1869 

The  answer  denies  the  material  allegations  in  the  petition,  and 
defendant  insists  there  was  a  valid  assessment  and  levy  and  the  sub- 
stantial requirements  of  law  complied  with. 

There  was  a  reference  and  a  finding  that  there  was  no  valid  as- 
sessment, and  the  taxes  illegal  and  void.  The  finding  was  confirmed 
by  the  court,  a  decree  accordingly  entered  and  defendants  appeal. 

SEEVERS,  J. 

III.  It  is  urged  that  the  plaintiff  and  other  taxpayers  were 
deprived  of  the  right  to  appear  before  the  board  of  equalization, 
which  at  that  time  was  composed  of  the  township  trustees,  and  they 
were  required  to  meet  for  the  performance  of  that  duty  on  the  first 
Monday  in  May.  Chap.  89,  Laws  of  the  Thirteenth  General  As- 
sembly. The  argument  of  the  appellee  is  based  on  the  assumption 
that  as  the  assessor  of  1870  did  not  qualify  until  after  the  first 
Monday  in  May  the  board  of  equalization  could  not  have  had  before 
them  the  assessment  made  by  him.  But  as  such  assessor  had  no 
duty  to  perform  as  to  real  property  assessed  in  1869,  and  could  not 
under  the  law  assess  the  same,  the  assumption  is  not  legally  correct. 
The  assessment  of  1869,  together  with  all  corrections  made  therein 
by  the  board  of  equalization  of  that  year,  if  any  such  there  were,  in 
the  absence  of  any  showing  to  the  contrary  must  be  presumed  to 
have  been  in  existence  and  in  the  custody  of  the  county  auditor  at 
20 


306  OFFICIAL  ACTION  IN  TAXATION. 

the  time  fixed  by  law  for  the  meeting  of  such  board  in  1870.  Such 
books  are  public  records,  open  to  the  inspection  of  all.  There  is  no 
showing  made  whether  or  not  the  board  met  on  the  appointed  day, 
but  the  presumption  is,  and  must  be  under  such  circumstances,  that 
they  performed  their  duty  at  the  proper  time  required  by  law.  It 
must  be  further  presumed,  in  the  absence  of  any  showing  to  the 
contrary,  that  such  board  had  before  them  the  proper  books  and 
papers  to  enable  them  to  perform  their  duties.  Such  being  the  case, 
the  plaintiff  was  not  deprived  of  the  opportunity  of  having  the  as- 
sessment of  his  property  corrected,  and  he  was  not,  therefore,  de- 
prived of  any  substantial  right. 

For  the  reasons  stated,  the  decree  of  the  Circuit  Court  will  be 
reversed,  and  a  decree  entered  in  this  court,  if  counsel  for  appellant 
so  elect,  in  accordance  with  this  opinion. 

Reversed. 


CHAPTER  VIII. 
CONSTRUCTION  OF  TAX  LAWS. 

EDWARD  A.  CORNWALL,  EXECUTOR,  V.  JAMES  TODD. 

Supreme  Court  of  Errors  of  the  State  of  Connecticut.     September, 

1871. 
38  Connecticut  443. 

Bill  in  Equity,  by  the  petitioner  as  executor  of  the  will  of  Thomas 
D.  Moss  deceased,  for  an  injunction  to  restrain  the  levy  of  a  tax 
warrant;  brought  to  the  Court  of  Common  Pleas  for  New  Haven 
county,  and  reversed,  on  facts  found,  for  advice.  The  case  is  suffi- 
ciently stated  in  the  opinion. 

CARPENTER,  J.  The  petitioner  is  the  executor  of  the  will  of 
Thomas  D.  Moss,  deceased.  In  the  year  1869,  he  made  and  re- 
turned to  the  assessors  of  the  town  a  list  of  the  taxable  property  of 
the  estate,  not  in  his  own  name  as  trustee,  but  in  the  name  of 
"Thomas  D.  Moss's  estate."  At  that  time  the  estate  had  not  been 
distributed  or  finally  disposed  of  by  the  court  of  probate.  There 
was  included  in  the  list  real  estate  and  money  at  interest.  Thomas 
D.  Moss  at  the  time  of  his  death  resided  in  the  fifth  school  district 
in  the  town  of  Cheshire,  where  his  widow  still  resides,  and  where 
the  real  estate  named  in  said  list  is  situated.  The  petitioner  re- 
sides in  the  first  school  district.  The  fifth  district  laid  a  tax  on 
the  list  of  1869,  including  in  the  rate  bill  a  tax  against  the  estate 
of  said  Moss  on  the  real  and  personal  property  in  said  list.  The 
respondent  is  the  collector  of  said  tax.  This  petition  is  brought  to 
restrain  him  from  collecting  the  tax  on  the  sum  of  four  thousand 
dollars  money  at  interest. 

2.  The  petitioner  in  the  next  place  claims  that  said  personal 
property  was  not  legally  taxable  in  the  fifth  school  district,  for  the 
reason  that  it  was  not  the  property  of  any  person  resident  therein. 
The  statute,  section  130,  page  349,  is  as  follows:  "Whenever  a  dis- 
trict shall  impose  a  tax,  the  same  shall  be  levied  on  all  the  real 

307 


308  CONSTRUCTION  OF  TAX  LAWS. 

estate  situated  therein,  and  upon  the  polls  and  other  ratable  estate, 
except  real  estate  situated  without  the  limits  of  such  district,  of 
those  persons  who  are  resident  therein  at  the  time  of  laying  such 
tax." 

The  question  practically  resolves  itself  into  this:  Who,  for  the 
purposes  of  taxation,  is  to  be  regarded  as  the  owner  of  this  prop- 
erty? We  think  we  may  with  propriety  say  that  it  belongs  to  the 
estate.  It  does  not  belong  to  the  executor,  except  in  a  limited  sense. 

It  does  not  belong  to.  the  heir  before  distribution; 

and  ordinarily  the  legatee  has  no  claim  until  the  debts  are  paid. 
In  common  parlance  we  speak  of  the  property  as  the  estate;  and 
'of  the  different  items  of  property  as  belonging  to  the  estate.  Anct 
when  the  statute  authorizes  the  executor  to  put  the  property  in  the 
list  in  the  name  of  the  deceased  person's  estate,  it  regards  the  estate 
as  an  intangible  being  or  person  capable  of  owning  property.  The 
executor  or  administrator  represents  that  being,  and  speaks  and  acts 
for  it,  and  in  its  name  and  behalf. 

Again.  So  far  as  the  property  is  concerned,  and  for  the  purposes 
of  collecting  and  paying  debts,  and  doing  justice  by  others,  the  acts 
and  doings  of  a  deceased  person  while  in  life  still  continue  to  affect 
the  living.  In  a  certain  legal  sense,  therefore,  and  for  certain  pur- 
poses, he  still  lives,  and  will  continue  to  live  until  those  purposes 
are  fully  accomplished.  As  he  is  incapable  ef  acting  for  himself, 
the  executor  or  administrator  represents  him.  The  law  requires  this 
property,  while  in  a  transition  state  from  the  dead  to.  the  living,  to 
bear  its  proportion  of  the  public  burdens.  For  the  purposes  of  tax- 
ation, therefore,  it  must  have  a  situs.  None  can  be  more  appro- 
priate than  the  place  where  the*  deceased  lived  and  died.  I  appre- 
hend, therefore,  the  true  rule  to  be  this:  The  personal  property  of 
a  deceased  person  is  taxable,  during  the  settlement  of  the  estate,  in 
the  place  of  domicil  of  the  deceased.  When  it  comes  into  the  pos- 
session of  the  heir  or  legatee,  it  must  be  taxed  in  the  place  where 
the  heir  or  legatee  resides.  When  it  goes  into  the  hands  of  a  trus- 
tee, under  the  will  or  otherwise,  then  the  statute  governs  it,  and  it 
must  be  taxed  where  the  trustee  resides,  or  where  the  person  re- 
sides for  whose  use  it  is  held  in  trust,  as  the  case  may  be.  Such  a 
rule  is  in  harmony  with  all  the  provisions  of  the  statute,  is  easily 
understood,  can  be  easily  applied,  and  will  work  no  injustice. 

The  greatest  and  perhaps  the  only  objection  that  can  be  urged 
against  this  rule  is,  that  we  cannot  say  in  strictness  that  the  de- 
ceased or  his  estate  is  a  resident  of  the  district.  This  objection  as- 
sumes that  the  statute  is  to  be  strictly  construed.  But  we  do  not 


CORNWALL  V.  TODD.  309 

think  that  the  doctrine  of  strict  construction  should  apply  to  it. 
Statutes  relating  to  taxes  are  not  penal  statutes,  nor  are  they  in 
derogation  of  natural  rights.  Although  taxes  are  regarded  by  many 
as  burdens,  and  many  look  upon  them  even  as  money  arbitrarily  and 
unjustly  extorted  from  them  by  government,  and  hence  justify 
themselves  and  quiet  their  consciences  in  resorting  to  questionably 
means  for  the  purpose  of  avoiding  taxation,  yet  in  point  of  fact  no 
money  paid  returns  so  good  and  valuable  a  consideration  as  money 
paid  for  taxes  laid  for  legitimate  purposes.  They  are  just  as  essen- 
tial and  important  as  government  iself;  for  without  them  in  some 
form  government  could  not  exist.  The  small  pittance  we  thus  pay 
is  the  price  we  pay  for  the  preservation  of  all  our  property,  and  the 
protection  of  all  our  rights.  But  there  is  not  only  a  necessity  for 
taxation,  but  it  is  eminently  just  and  equitable  that  it  should  be  as 
nearly  equal  as  possible.  Hence  it  is  the  policy  of  the  law  to  re- 
quire all  property,  except  such  as  is  especially  exempted,  to  bear  its 
proportion  of  the  public  burdens.  Not  only  so,  but  the  law  mani- 
festly contemplates  that  property  rated  in  the  list  shall  be  liable 
for  all  taxes — town  and  school  district  taxes  alike.  This  is  evident 
from  the  provision  that  district  taxes  shall  be  laid  on  the  town  list, 
with  special  provision  for  certain  changes  rendered  necessary  in 
order  to  tax  all  the  real  estate  situated  within  the  district,  and 
none  situated  without,  and  also  to  assess  the  tax  in  each  instance 
upon  the  right  person.  In  construing  statutes  relating  to  taxes, 
therefore,  we  ought,  where  the  language  will  permit,  so  to  construe 
them  as  to  give  effect  to  the  obvious  intention  and  meaning  of  the 
legislature,  rather  than  to  defeat  that  intention  by  a  too  strict  ad- 
herence to  the  letter. 

Again.  The  same  process  of  reasoning  which  would  exempt  this 
property  from  taxation  in  the  district,  on  the  ground  now  under 
consideration,  would  also  exempt  it  from  all  taxes.  The  3d  section 
of  the  act,  page  706,  provides,  that  the  assessors  shall  give  public 
notice  "requiring  of  all  persons  in  such  town  who  are  liable  to  pay 
taxes  &c."  The  words  italicised  have  the  same  meaning  in  respect 
to  towns,  that  the  words,  "persons  who  are  residents  therein,"  have 
in  respect  to  school  districts.  It  is  not  denied,  however,  that  the 
town  may  tax  it,  as  the  statute  expressly  provides  for  putting  it 
into  the  list.  Another  statute  requires  the  district  tax  to  be  laid 
on  the  town  list;  and  there  is  no  provision  for  a  change  in  respect 
to  this  kind  of  property.  Property  in  the  tax  list  is  subject  to  dis- 
trict taxes,  unless  otherwise  provided  by  statute.  As  there  is  no 


310  CONSTRUCTION  OF  TAX  LAWS. 

special  provision  affecting  this  property,  we  think  it  was  properly 
taxed. 

For  these  reasons  we  advise  the  Court  of  Common  Pleas  to  dis- 
miss the  bill. 

In  this  opinion  the  other  judges  concurred. 


PEOPLE  EX  REL.  OTSEGO  COUNTY  BANK,  RESPOND- 
ENT, V.  BOARD  OF  SUPERVISORS  OF  OT- 
SEGO COUNTY,  APPELLANT. 

Commission  of  Appeals  of  the  State  of  New  York.    January,  187S. 

51  New  York  401. 

Appeal  from  an  order  of  the  General  Term  of  the  Supreme  Court 
in  the  sixth  judicial  district,  reversing  an  order  of  the  Special 
Term  and  granting  a  peremptory  mandamus  against  the  defendant. 

In  the  year  1863,  the  relator  had,  as  part  of  its  capital,  $65,000 
invested  in  the  stocks  of  the  United  States,  and  for  the  assessment 
of  that  year  paid  upon  such  stocks  taxes  to  the  amount  of  $812.50, 
besides  collector's  fees.  In  the"  year  1864,  it  had,  as  part  of  its 
capital,  $91,000  invested  in  stocks  of  the  United  States  upon  which 
it  paid  for  the  assessment  of  that  year  a  tax  of  $6,670.30,  besides 
collector's  fees. 

In  November,  1867,  the  relator,  claiming  that  such  taxes  had 
been  unjustly  paid  on  the  ground  that  such  stocks  were  exempt 
from  taxation,  applied  to  the  defendant  under  the  act,  chapter  938 
of  the  Laws  of  1867,  to  have  such  taxes  audited  and  allowed,  as 
provided  in  said  act. 

The  defendant  refused  to  allow  the  claim,  and  then  the  relator, 
upon  affidavits  and  notice  of  motion,  applied  to  the  Special  Term 
of  the  Supreme  Court  for  a  mandamus  to  compel  the  allowance  of 
the  claims,  and  the  court  ordered  that  the  defendant,  "without  de- 
lay, determine,  audit,  and  allow  the  said  claims,  and  levy  the 
amount  thereof  by  tax,  as  required  by  said  act,  or  show  cause"  at 
a  time  named. 

EARL,  C.  Prior  to  1863,  the  taxation  of  banks  formed  under  the 
laws  of  this  State,  was  regulated  by  chap.  456  of  the  Laws  of  1857, 
which  provided  that  "the  capital  stock  of  every  company,  liable  to 
taxation,  except  such  part  of  it  as  shall  have  been  excepted  in  the 
assessment  roll  or  shall  have  been  exempted  by  law,  together  with 


OTSEGO  BANK  V.  SUPERVISORS.        311 

its  surplus  profits  or  reserved  funds,  exceeding  ten  per  cent  of  its 
capital,  after  deducting  the  assessed  value  of  its  real  estate  and  all 
shares  of  stock  in  other  corporations  actually  owned  by  such  com- 
pany which  are  taxable  upon  their  capital  stock  under  the  laws  of 
this  State,  shall  be  assessed  at  its  actual  value,  and  taxed  in  the 
same  manner  a?  the  other  personal  and  real  estate  of  the  county.'' 
Under  this  law  the  court  of  appeals  held,  in  the  People  v.  Commis- 
sioners of  Taxes  and  Assessments,  (23  X.  Y.  192),  that  stocks  of 
the  United  States,  owned  by  banks,  were  not  exempt  from  taxation. 
That  case  was  taken  by  writ  of  error  to  the  Supreme  Court  of  the 
United  States,  and  there  the  judgment  was  reversed  (2  Black. 
620)  ;  the  court  holding  that  that  portion  of  the  capital  of  a  bank, 
invested  in  the  stock,  bonds  or  other  securities  of  the  United  States, 
was  not  liable  to  taxation  by  State  authority.  That  decision  was 
announced  in  March,  1863,  and,  doubtless  for  the  purpose  of  avoid- 
ing the  effect  of  it,  in  April,  1863,  the  legislature  passed  an  act 
(chap.  240)  which  provided  as  follows:  "All  banks,  etc.,  shall  be 
liable  to  taxation  on  a  valuation  equal  to  the  amount  of  their  capi- 
tal stock  paid  in  or  secured  to  be  paid  in,  and  their  surplus  earn- 
ings (less  ten  per  cent  of  such  surplus),  in  the  manner  now  pro- 
vided by  law,  deducting  the  value  of  the  real  estate  held  by  such 
corporation  or  association,  and  taxable  as  real  estate."  It  was  un- 
der this  statute  that  the  taxes  in  question  were  imposed.  The 
courts  of  this  State  again  held  that  the  banks  could  be  taxed  "on  a 
valuation  equal  to  the  amount  of  their  capital  stock,"  notwith- 
standing a  portion  of  their  capital  stock  was  invested  in  United 
States  stocks;  but  the  decisions  were  again  reversed  by  the  Su- 
preme Court  of  the  United  States  (Bank  Tax  Case,  2  Wall.  200), 
that  court  deciding  that  the  tax  imposed  under  that  law  was  still 
a  tax  upon  the  property  of  the  banks,  and  that  so  much  of  such 
property  as  was  invested  in  United  States  stocks  was  exempt  from' 
taxation.  That  decision  was  not  announced  until  after  the  taxes  in 
question  had  been  paid  and  collected.  It  follows  that  these  taxes, 
although  voluntarily  paid,  were  illegally  exacted,  and  that  the  re- 
lator  had  a  just  claim  to  have  them  refunded.  But  it,  as  well  as 
other  banks  similarly  situated,  was  without  any  remedy  by  which  it 
could  enforce  repayment,  and  hence  the  act  (chap.  938,  Laws  of 
1867),  entitled  "An  act  providing  for  relief  against  illegal  tax- 
ation" in  Herkimer  and  other  counties  was  passed. 

The  first  section  of  the  act  provides  that  the  boards  of  super- 
visors of  the  several  counties  mentioned  are  "authorized  and  em- 
powered, upon  the  application  of  any  party  aggrieved,  to  hear  and 


312  CONSTRUCTION'  OF  TAX  LAWS. 

determine  any  claim  of  an  assessment  for  taxes  made  in  their  re- 
spective counties  upon  United  States  bonds,  stocks  or  securities, 
any  or  all  of  them  which  by  law  are  or  have  been  exempt  from  tax- 
ation, and  to  repay  to  the  proper  person  the  amount  collected  or 
paid  upon  such  assessment."  Section  3,  provides  that,  whenever 
such  claim  shall  be  audited  and  allowed,  the  board  of  supervisors 
shall  levy  the  amount  thereof  upon  the  taxable  property  of  the 
county. 

The  first  question  to  be  determined  is  whether  this  act  was  merely 
permissive  or  mandatory  to  boards  of  supervisors.  To  determine 
this  question,  not  only  the  language  of  the  act,  but  the  circum- 
stances surrounding  its  passage  and  the  object  had  in  view,  must  be 
considered.  The  highest  judicial  authority  in  the  land  had  de- 
cided that  these  taxes  were  illegally  exacted.  The  relator,  there- 
fore, had  a  claim,  based  upon  natural  justice  and  equity,  that  the 
taxes  should  be  refunded,  and  as  there  was  no  way  to  compel  the 
counties  to  refund  them  this  act  was  passed.  The  title  of  the  act 
shows  that  it  was  to  provide  "relief  against  illegal  taxation."  This 
relief  would  be  quite  illusory  if  it  were  left  to  the  absolute  discre- 
tion of  the  board  of  supervisors  of  any  county  to  refund  the  taxes 
or  not,  as  it  might  see  fit.  The  act  recognizes  the  party  who  has 
paid  these  taxes  as  an  aggrieved  party,  who  has  a  claim  against  the 
county,  which  is  to  be  audited  and  allowed  like  other  claims  against 
the  county.  It  is  not  to  be  presumed  that  the  legislature  intended 
that  the  counties  and  towns  which  had  the  benefit  of  this  illegal 
taxation  should  have  the  option,  through  their  supervisors  to  de- 
termine whether  they  would  do  justice  to  the  wronged  tax-payers 
by  refunding  the  taxes  illegally  exacted,  or  not.  The  purpose  of 
the  act,  as  well  as  the  simplest  justice,  requires  that  we  should 
hold  that  it  is  mandatory  upon  the  respective  boards  of  supervisors, 
unless  there  is  something  in  the  plain  language  used  that  forbids 
such  a  construction.  The  words  "authorized  and  empowered"  are 
usually  words  of  permission  merely,  and  generally  have  that  sense 
when  used  in  contracts  and  private  affairs;  but  when  used  in  stat- 
utes, they  are  frequently  mandatory  and  imperative.  In  Dwarris. 
p.  604,  the  rule  is  laid  down  as  follows:  "Words  of  permission 
shall  in  certain  cases  be  obligatory.  Where  the  statute  directs  the 
doing  of  a  thing  for  the  sake  of  justice,  the  word  may  means  the 
same  thing  as  the  word  shall" 

In  E ex  v.  Barlow,  (2  Salk.  609),  it  is  said  that  where  the  stat- 
ute directs  the  doing  of  a  thing  for  the  sake  of  justice  or  the  pub- 
lic good,  the  word  "may"  is  the  same  as  the  word  "shall."  That 


OTSEGO  BANK  V.  SUPERVISORS.        313 

was  a  case  under  14  Car.  II,  ch.  12  which  gave  power  and  author- 
ity to  the  church-wardens,  etc.,  to  make  an  assessment  to  reimburse 
the  constables;  that  statute  was  held  to  be  imperative,  for  the 
reason  that  both  the  public  and  the  constable  had  an  interest  in 
having  the  authority  exercised. 

In  The  King  v.  The  Inhabitants  of  Derby,  (Skinner,  370),  a 
motion  was  made  to  quash  an  indictment  found  against  the  inhabi- 
tants "for  refusing  to  meet  and  make  a  rate  to  pay  a  constable's 
tax."  The  ground  for  the  motion  was  that  the  statute  was  not  im- 
perative, but  merely  they  "may  meet,"  etc.  The  court,  however, 
held  may,  in  the  case  of  a  public  officer,  was  tantamount  to  shall. 

In  Supervisors  v.  United  States,  (4  Wallace  435),  a  statute  of 
Illinois  provided  that  the  board  of  supervisors  "may,  if  deemed  ad- 
visable, levy  a  special  tax,"  etc.  TMs  language  was  held  to  be 
peremptory,  and  not  merely  permissive.  Mr.  Justice  SWAYNE  sums 
up  the  authorities  on  the  question  as  follows:  "The  conclusion  to 
be  deduced  from  the  authorities  is  that  where  power  is  given  to 
public  officers  in  the  language  of  the  act  before  us,  or  in  equiva- 
lent language,  whenever  the  public  interest  or  individual  rights  call 
for  its  exercise,  the  language  used,  though  permissive  in  form,  is 
in  fact  peremptory.  What  they  are  empowered  to  do  for  a  third 
person,  the  law  requires  shall  be  done.  The  power  is  given  not  for 
their  benefit,  but  for  his.  It  is  placed  with  the  depositary  to  meet 
the  demands  of  right  and  to  prevent  a  failure  of  justice.  It  is 
given  as  a  remedy  to  those  entitled  to  invoke  its  aid,  and  who  would 
otherwise  be  remediless." 

In  The  City  of  Galena  v.  Amy,  (5  Wallace  705),  where  an  act 
amending  a  city  charter  said  that  the  city  council  "may,  if  it  be- 
lieve that  the  public  good  and  the  best  interests  of  the  city  require" 
it,  levy  a  tax  to  pay  its  funded  debt,  it  was  held  a  mandamus  would 
lie,  at  the  suit  of  a  judgment  creditor,  to  make  it  levy  the  tax. 

In  The  Mayor,  etc.,  of  the  City  of  New  York  v.  Furze  (3  Hill 
012),  Chief  Justice  Nelson,  after  citing  and  commenting  on  many 
cases,  laid  down  the  rule  as  follows:  "Where  a  public  body  or  offi- 
cer has  been  clothed  by  statute  with  power  to  do  an  act  which  con- 
cerns the  public  interest  or  the  rights  of  third  persons,  the  execu- 
tion of  the  power  may  be  insisted  on  as  a  duty,  though  the 
phraseology  of  the  statute  be  permissive  merely  and  not  peremp- 
tory." 

These  authorities  are  abundant  to  show  that  the  language  used 
in  the  act  under  consideration  must  be  construed  to  be  imperative, 
and  that  the  board  of  supervisors  was  commanded  to  hear  and  de- 


314  CONSTRUCTION  OF  TAX  LAWS. 

termine,  audit  and  allow  the    relator's    claim,    and    cause  the  tax 
illegally  paid  to  be  refunded. 

I  am,  therefore,  of  the  opinion  that  the  order  should  be  affirmed, 
with  costs. 
All  concur. 
Order  affirmed. 


TORREY  V.  INHABITANTS  OF  MILLBURY. 

Supreme  Judicial  Court  of  Massachusetts.     October,  1838. 
21  Pickering  64. 

SHAW,  C.  J.,  delivered  the  opinion  of  the  court. 

The  plaintiff  seeks  in  this  action  to  recover  back  a  sum  paid  as 
a  town  tax  upon  a  warrant  of  distress,  upon  the  ground  that  the 
tax  was  illegally  and  irregularly  assessed. 

The  first  objection  to  the  irregularity  of  the  assessment  is,  that 
the  assessors  did  not  comply  with  the  directions  of  the  statute,  in 
making  out  the  list  containing  the  valuation  and  assessment  of 
polls  and  estates,  inasmuch  as  it  did  not  exhibit  in  distinct  columns, 
"the  true  value  of  real  estate,"  "the  reduced  value  of  real  estate," 
and  the  same  of  personal  estate,  but  only  one  column  for  real  and 
one  for  personal,  headed  "value."  Revised  Stat.,  c.  7,  §  15,  29,  30. 
The  Revised  Statutes  in  the  sections  cited,  require  that  the  lists, 
amongst  other  particulars,  shall  distinguish  the  "true  value,"  and 
"reduced  value."  The  question  is,  whether  this  irregularity  renders 
the  valuation  and  assessment  void,  so  that  each  person  taxed  may 
take  advantage  of  it,  and  recover  back  the  amount  paid. 

In  considering  the  various  statutes  regulating  the  assessment  of 
taxes,  and  the  measures  preliminary  thereto,  it  is  not  always  easy 
to  distinguish  which  are  conditions  precedent  to  the  legality  of  the 
tax,  and  which  are  directory  merely,  and  do  not  constitute  condi- 
tions. One  rule  is  very  plain  and  well  settled,  that  all  those  meas- 
ures, which  are  intended  for  the  security  of  the  citizen,  for  ensur- 
ing an  equality  of  taxation,  and  to  enable  every  one  to  know,  with 
reasonable  certainty,  for  what  polls  and  for  what  real  and  personal 
estate  he  is  taxed,  and  for  what  all  those  who  are  liable  with  him 
are  taxed,  are  conditions  precedent,  and  if  they  are  not  observed  he 
is  not  legally  taxed,  and  he  may  resist  it  in  any  of  the  modes  au- 
thorized by  law  for  contesting  the  validity  of  the  tax. 


TOKEEY  V.  MILLBUHY.  315 

But  many  regulations  are  made  by  statute,  designed  for  the  in- 
formation of  assessors  and  officers,  and  intended  to  promote  method, 
system  and  uniformity  in  the  modes  of  proceeding,  the  compliance 
or  non-compliance  with  which,  does  in  no  respect  affect  the  rights 
of  tax-paying  citizens.  These  may  be  considered  directory;  officers 
may  be  liable  to  legal  animadversion,  perhaps  to  punishment,  for 
not  observing  them,  but  yet  their  observance  is  not  a  condition 
precedent  to  the  validity  of  the  tax.  On  consideration,  the  Court 
are  of  opinion,  that  the  requirement  in  the  statute,  in  regard  to 
"reduced  value,"  is  of  the  latter  character. 

We  take  it  to  be  clear,  that  the  requisition  in  question  is  founded 
on  the  common  custom  of  forming  a  column  of  "reduced  value," 
which  had  existed  before  the  statute,  adopted  for  the  ease  and  con- 
venience of  computation  in  apportioning  the  taxes.  But  the  "re- 
duced value"  is  of  course  a  fixed  proportion  of  the  true  value,  as  a 
half,  or  quarter,  10  per  cent  or  the  like.  The  true  value  is  first 
estimated  by  the  assessors  in  the  manner  provided  by  law,  that  is, 
by  returns,  or,  in  default  of  returns  being  made,  by  appraisement, 
and  then  the  column  of  reduced  value  is  found  by  computation, 
upon  a  uniform  scale  of  reduction.  It  follows  therefore  as  a  neces- 
sary consequence,  that  whether  there  be  a  column  of  reduced  value 
or  not,  makes  no  difference  as  to  the  actual  amount  of  property,  for 
which  each  one  on  the  list  is  assessed,  or  the  rate  which  each  and 
every  one  will  have  to  pay.  It  is  a  requisition  merely  affecting  the 
mode  of  framing  the  tax  list,  not  affecting  in  any  degree  the  rights 
of  any  tax-payer,  and  therefore  the  Court  are  of  opinion,  that  it  is 
directory,  not  a  condition  precedent,  and  that  the  failure  to  comply 
with  it,  on  the  part  of  the  assessors,  did  not  render  the  tax  illegal 
or  void. 

4.  Another  exception  to  the  regularity  of  the  tax  paid  by  the 
plaintiff  is,  that  it  included  $100  to  build  a  town  road,  recently 
laid  out  by  the  selectmen.  It  appears  by  the  report,  that  although 
there  was  a  warrant  "to  see  if  the  town  would  accept  the  road  re- 
cently laid  out,  etc.,"  and  though  there  was  a  vote  to  accept,  yet 
that  no  location  of  the  road  with  the  boundaries  and  admeasure- 
ments thereof,  had  been  made  by  the  selectmen,  and  no  report  of 
such  laying  out,  with  the  boundaries  and  admeasurements  thereof, 
had  been  filed  in  the  office  of  the  town  clerk,  seven  days  before  the 
meeting.  These  preliminary  proceedings  are  required  by  the  Re- 
vised Statutes,  c.  24,  §  69,  and,  a  report  from  the  selectmen  was 
required  by  the  former  statute.  St.  1816,  c.  67,  §  1.  So  that 


316  CONSTRUCTION  OF  TAX  LAWS. 

whether  the  vote  was  before  or  after  the  Revised  Statutes,  which  is 
left  a  little  uncertain  on  the  report,  we  think  there  were  no  pro- 
ceedings of  the  selectmen  for  the  town  to  act  upon,  and  therefore 
the  vote  of  the  town  was  inoperative  and  void.  The  vote  to  raise 
money  by  a  tax  for  the  building  of  this  road,  was  consequently 
premature  and  invalid,  and  the  plaintiff  was  not  bound  to  pay  it. 

But  as  this  is  an  action  of  assumpsit,  to  recover  back  money 
which  the  plaintiff  was  not  liable  to  pay,  and  as  it  is  entirely  prac- 
ticable to  distinguish  that  part  of  the  tax  which  was  valid  from 
that  which  was  void,  the  Court  are  of  opinion,  that  the  plaintiff  is 
entitled  to  recover  back  that  part  of  the  money  paid  by  him  which 
was  assessed  upon  him  as  his  share  of  the  $100,  assessed  on  account 
of  the  road. 

As  the  warrant  of  distress  was  rightly  issued  for  the  other  part 
of  the  tax,  which  the  plaintiff  wrongfully  refused  to  pay,  he  has  no 
right  to  recover  back  the  costs  attending  the  service  of  the  warrant 
of  distress. 


PRICE  V.  MOTT. 

Supreme  Court  of  Pennsylvania.     1866. 
52  Pennsylvania  State  315. 

This  was  an  action  of  trespass  q.  c.  f.,  etc.,  commenced  Septem- 
ber 5th,  1859,  by  Oscar  H.  Mott  against  Gilbert  E.  Palen,  George 
W.  Northrop  and  William  Price. 

In  1825  Mordecai  Roberts  owned  a  title  by  warrant  to  a  tract  of 
unseated  land.  A  survey  of  the  land  was  made  December  28th, 
1852,  returned  and  accepted.  On  the  12th  of  June,  1854,  the  land 
was  sold  for  taxes  to  Mott,  the  plaintiff,  who  received  the  treas- 
urer's deed  therefor.  On  the  8th  of  March,  1856,  Mott  paid  taxes 
on  the  land  for  1854  and  1855.  John  T.  Cross,  on  the  25th  of 
April,  1856,  became  owner  of  an  undivided  interest  in  the  land, 
and  for  the  purpose  of  redeeming  it,  on  the  llth  of  June,  same 
year,  paid  to  the  treasurer  the  amount  of  taxes  for  which  it  was 
sold,  costs  and  penalty,  but  did  not  pay  the  taxes  which  Mott  had 
paid  after  his  purchase.  Palen  and  Northrop  derived  their  title  by 
conveyance  from  Cross,  and  from  some  other  heirs  of  Roberts. 
There  was  proof  of  cutting  and  carrying  away  timber  by  Price,  but 
the  principal  question  was  title  to  the  land.  The  court  (Barrett, 
P.  J.),  amongst  other  things,  charged: 


PRICE  V.  MOTT.  317 

"Did  Cross  do  all  that  the  law  required  of  him?  We  think  not. 
The  act  of  8th  of  May,  1855,  declares,  that  'in  addition  the  owner 
shall  pay  the  taxes  which  the  purchaser  shall  have  paid,  which  have 
accrued  since  the  sale,  and  before  the  time  allowed  to  redeem  has 
expired/  The  act  is  positive  in  its  terms,  and  applies  as  well  to 
the  sales  of  1854  as  to  any  subsequent  sales.  On  the  8th  day  of 
March,  1856,  before  any  offer  was  made  to  redeem,  the  purchaser 
paid  into  the  office  the  taxes  which  had  accrued  for  the  years  1855 
and  1856.  The  owner  was  bound  to  pay  that  amount  in  addition 
to  what  he  did  pay.  It  is  no  sufficient  answer  to  say  that  he  did 
not  know  of  the  existence  of  the  Act  of  Assembly.  He  was  bound 
to  know  the  law.  He  did  not  comply  with  it,  and  the  jury  are  in- 
structed that  the  attempted  redemption  was  incomplete,  and  there- 
fore void." 

There  was  a  verdict  against  Price  for  $100. 

The  above  portion  of  the  charge  was  assigned  for  error. 

The  opinion  of  the  court  was  delivered  May  15th,  1866,  by 

WOODWARD,  C.  J.  We  are  of  opinion  that  the  redemption  was 
effectual.  It  was  made  within  two  years  after  the  tax  sale  waa 
made,  by  one  whose  interest  entitled  him  to  redeem,  and  he  paid 
all  the  redemption-money  which  the  treasurer  demanded. 

When  an  owner  of  unseated  lands  presents  himself  at  the  treas- 
urer's office  and  offers  to  pay  taxes  or  redeem  lands  from  tax  sales, 
the  treasurer,  as  a  public  officer,  has  duties  to  perform,  the  neglect 
of  which  cannot  fairly  be  charged  against  him  who  is  doing  for 
himself  all  that  the  law  enjoined.  Baird  v.  Cahoon,  5  W.  &  S.  540. 
If  the  taxes  which  Mott  had  paid  for  the  years  1854  and  1855 
ought  to  have  been  charged  to  Cross  as  part  of  the  redemption- 
money,  it  was  the  treasurer's  fault  that  they  were  not.  They  ap- 
peared upon  the  treasurer's  books,  and  he  had  what  Cross  had  not — 
notice  that  they  had  been  paid.  It  was  his  duty,  therefore,  to  de- 
mand them,  and  Cross  is  not  to  be  damaged  by  his  neglect:  Bull 
\.  Tempi-ins,  11  Wright  359. 

But  we  have  great  doubts  whether  these  taxes  were  demandable 
under  the  Act  of  8th  of  May,  1855,  Purd.  99T.  There  is  nothing 
in  the  terms  of  the  act  to  compel  a  construction  which  would  give 
it  retroactive  effect,  and  we  always  construe  statutes  as  prospective 
and  not  retrospective,  unless  constrained  to  the  contrary  course  by 
the  rigour  of  the  phraseology.  These  taxes  were  assessed  and  paid 
before  the  enactment.  When  they  were  paid  the  law  did  not  re- 
quire them  to  be  added  to  the  redemption-money,  and  though  the 
redemption-money  was  paid  more  than  a  year  after  the  enactment, 


318  CONSTRUCTION  OF  TAX  LAWS. 

it  is  by  no  means  clear  that  it  was  the  treasurer's  duty  to  add  them 
then.  But  if  it  was,  his  official  neglect  cannot  invalidate  Cross's 
act,  however  it  may  ground  a  liability  of  the  treasurer  to  Mott. 
And  a  valid  redemption  defeated  the  plaintiff's  title  altogether,  so 
that,  quite  irrespective  of  all  the  other  questions  upon  the  record, 
he  ought  not  to  have  been  permitted  to  .recover. 

The  judgment  is  reversed,  and  a  venire  facias  de  novo  awarded. 


DREXEL  &  CO.  V.  COMMONWEALTH. 

Supreme  Court  of  Pennsylvania.    July,  186S. 
46  Pennsylvania  State  31. 

READ,  J.  The  Act  of  16th  of  May,  1861,  requires  all  stock,  bill 
and  exchange  brokers  and  private  bankers,  on  or  before  the  first 
Monday  of  December  next,  and  on  or  before  the  same  day  of  each 
year  thereafter,  to  make  a  written  return,  under  oath  or  affirmation, 
to  the  auditor-general  of  this  Commonwealth,  in  which  return  shall 
be  exhibited  and  set  forth  the  full  amount  of  receipts  from  com- 
missions, discounts,  abatements,  allowances,  and  all  other  profits 
arising  from  the  business  during  the  year  ending  the  thirtieth  day 
of  November  preceding  the  date  of  such  annual  returij,  and  shall 
forthwith  pay  into  the  state  treasury  three  per  centum  on  the  ag- 
gregate amount  contained  in  such  return  for  the  use  of  the  Com- 
monwealth. The  third  section  imposes  a  penalty  of  $1,000  for  every 
neglect  or  refusal  to  make  such  return.  Drexel  &  Company  were 
stock,  bill  and  exchange  brokers  and  private  bankers,  and  neglected 
and  refused  to  make  any  return  in  1861.  The  court  below  decided 
they  were  liable  to  the  penalty,  and  gave  judgment  for  the  Com- 
monwealth. The  act  clearly  intended  to  levy  a  tax  of  three  per 
centum  on  the  profits  or  income  of  the  business,  and  was  not  meant 
to  tax  capital.  Profits  must  necessarily  be  the  net  profits  of  the 
business,  and  the  Commonwealth  was  to  receive  of  them  three  per 
cent.  It  was  in  fact  a  tax  upon  the  income  of  the  business  in 
which  the  defendants  were  engaged.  The  English  income  tax  and 
the  United  States  income  tax  are  based  upon  the  incomes  received 
in  preceding  years.  The  present  United  States  income  tax  is 
laid  upon  the  incomes  received  in  the  year  1862,  and  the  act  of 
Congress  of  the  5th  of  August.  1861  (12  Stat.  at  Large,  309),  ex- 
pressly declare?  that  "the  tax  herein  provided  shall  be  assessed 


DREXEL  &  CO.  V.  COMMONWEALTH.  319 

upon  the  annual  income  of  the  persons  hereinafter  named,  for  the 
year  next  preceding  the  first  of  January,  1862,  and  the  said  taxes, 
when  so  assessed  and  made  public,  shall  become  a  lien  upon  the 
property  or  other  sources  of  said  income  for  the  amount  of  the 
same,  with  the  interest  and  other  expenses  of  collection  until  paid." 

It  is  clearly  therefore  perfectly  constitutional  as  well  as  expedi- 
ent, in  levying  a  tax  upon  profits  or  income,  to  take  as  the  measure 
of  taxation  the  profits  or  income  of  a  preceding  year.  To  tax  is 
legal  and  to  assume  as  a  standard  the  transactions  immediately  prior 
is  certainly  not  unreasonable,  particularly  when  we  find  it  always 
adopted  in  exactly  similar  cases.  The  tax  is  graduated  upon  each 
individual  upon  his  individual  receipts. 

The  penalty  imposed  upon  all  persons  refusing  or  neglecting  to 
give  a  list  as  required  by  the  Act  of  Congress  (12  Stats,  at  Large, 
235),  is  $100,  whilst  our  penalty  is  $1,000  upon  a  similar  offence, 
by  a  particular  class  of  moneyed  operators.  The  objection  that 
the  penalty  is  ex  post  facto  is  not  founded  in  fact,  for  it  is  imposed 
for  the  non-performance  of  a  duty  long  after  the  passage  of  the  act. 

The  court  below  have  confined  the  operation  of  the  act  in  the 
present  case  to  the  period  between  its  passage  and  the  30th  of  No- 
vember, 1861,  during  which  time  it  was  clearly  the  duty  of  the 
defendants  to  keep  such  accounts  as  might  enable  them  to  make  the 
return  required  by  law.  As  no  return  of  any  kind  was  made,  it  is 
unnecessary  for  us  to  say  whether  we  might  not  have  been  still 
more  lenient  as  to  the  time  to  be  comprised  in  the  return,  if  a 
return  had  been  actually  made,  and  a  good  reason  assigned  why  it 
could  not  be  made  more  explicit,  and  in  strict  conformity  to  the  re- 
quirements of  the  law 

The  judgment  is  affirmed. 


CHAPTER   IX. 
CURING  DEFECTS  IN  TAX  PROCEEDINGS. 

McCEEADY  V.  SEXTON  &  SON. 

Supreme   Court  of  Iowa.     June,  1870. 
29  Iowa  356. 

COLE,  Ch.  J. 

VI.  It  was  objected  that  the  evidence  of  the  record  of  sales, 
certificates,  etc.,  were  incompetent,  because  the  tax  deed  was  con- 
clusive as  to  those  and  other  facts.  On  the  other  hand  it  is 
objected  that  the  deed  is  neither  conclusive  nor  prima  facie 
evidence  of  any  but  the  three  facts  specified.  The  latter  objec- 
tion is  based  upon  this  reasoning,  to-wit:  so  much  of  section 
784  as  declares  the  treasurer's  deed  conclusive  evidence  that  all 
the  prerequisites  of  the  law  to  make  a  good  and  valid  sale,  and 
vest  the  title  in  the  purchaser,  were  done;  except  as  to  the  three 
particulars:  the  liability  of  the  land  to  taxation,  the  non-pay- 
ment of  taxes,  and  non-redemption  from  sale,  is  unconstitutional 
and  void;  that  the  declaration  that  the  deed  shall  be  conclusive 
evidence  being  inoperative,  and  there  being  no  statutory  declaration 
that  it  shall  be  prima  facie  evidence,  the  deed  stands  as  at  common 
law,  and  proof  must  first  be  made  of  the  facts  authorizing  it, 
before  the  deed  itself  can  be  introduced. 

The  power  of  the  legislature  to  declare  that  the  tax  deed  shall 
be  conclusive  evidence  that  all  the  prerequisites  of  the  law  were 
complied  with,  has  never  been  directly  adjudicated  by  this  court. 
Such  power  is  denied,  as  being  in  violation  of  that  clause  of  the 
constitution  of  our  state  (and  common  to  all  state  constitutions) 
which  declares  that  "no  person  shall  be  deprived  of  life,  liberty 
or  property  without  due  process  of  law."  Art.  1-,  section  9. 

Let  us  now  examine  the  question  more  carefully  and  critically 
in  the  light  of  both  principle  and  precedent.  The  right  of  tax- 
ation and  the  right  of  eminent  domain  are  the  highest  sovereign 
rights.  They  are  essential  to  and  necessarily  inhere  in  every 

320 


M'CREADY  V.  SEXTON  &  SON.  321 

sovereign  power.  They  are  different  rights  and  are  differently 
exercised,  and  though  absolute  and  sovereign  in  their  character, 
they  are  nevertheless  to  be  exercised  only  in  accordance  with  cer- 
tain fundamental  principles.  And  although  the  taking  of  property 
by  taxation  is  not  strictly,  or  in  its  technical  sense,  the  taking  of 
property  by  due  process  of  law,  yet  it  has  never  been  held  or 
claimed  that  the  legislature  might  confiscate  property  for  the 
non-payment  of  taxes  thereon.  A  process  prescribed  by  law,  has 
ever  been  held  necessary  in  order  to  the  rightful  exercise  of  the 
taxing  power.  No  person  has  ever  claimed,  and  certainly  no 
court  has  ever  decided,  that  it  would  be  competent  for  a  legislature 
to  declare  that  if  the  owner  of  real  estate  failed  to  pay  the  pro- 
portion of  taxes  due  thereon,  on  or  before  the  date  named,  that 
any  other  person  might  pay  the  tax  and  thereby  become  owner  of 
the  land.  But,  on  the  contrary,  it  has  ever  been  held,  that  certain 
steps  must  be  taken  before  the  right  to  demand  the  tax,  or  to  sell 
the  property  for  the  non-payment  thereof  arose.  These  acts,  it, is 
true,  are  such  as  are  absolutely  or  relatively  necessary  in  order 
to  ascertain  and  £x  the  proper  amount  of  taxes  chargeable  to  each 
item  of  property.  These  steps  while  they  are  not  by  the  books 
technically  "due  process  of  law,"  nevertheless,  are  very  analogous 
to  the  steps  ordinarily-  attending  judicial  proceedings  in  rem. 

There  is,  first,  the  listing  and  assessing  of  the  property.  These 
may  be  likened  to  the  seizure  of  the  property  by  judicial  process, 
whereby  the  jurisdiction  over  the  rem  attaches.  Then,  secondly, 
there  is  the  levy  of  the  tax  upon  the  property,  in  proportion  to  its 
value,  so  much  per  centum.  This  may  be  likened  to  a  judgment 
in  rem,  condemning  the  property  to  the  payment  of  the  claim  for 
which  it  was  seized.  Then,  thirdly,  there  is  the  tax  warrant,  or  an 
express  statutory  provision,  authorizing  the  collector  to  sell  the 
property  for  the  payment  of  the  taxes  thus  levied  upon  it.  This 
is  very  like  the  order  or  execution  issued  by  the  court  for  the 
sale  of  the  rem,  which  had  before  been  seized  and  condemned  by  it. 
Then,  fourthly,  there  is  the  sale  of  the  property  by  the  collector 
under  the  authority  conferred  by  the  tax  warrant  under  the  statute, 
or  by  the  statute  itself  directly.  This  is  like  the  sale  of  the  rem 
by  the  officer  under  the  order  or  execution  issued  by  the  court. 
These,  it  must  readily  be  seen,  are  essential  to  the  exercise  of  the 
taxing  power;  and  no  revenue  law  could  be  of  practical  effect 
without  them;  and  it  may  safely  be  said  that  every  revenue  law 
contains  them.  This  listing  is  necessary  in  order  to  describe  and 
identify  the  property;  the  assessing ,  in  order  to  ascertain  its  value; 
21 


322          CURING  DEFECTS  IN  TAX  PROCEEDINGS. 

the  levy,  in  order  to  fix  the  proportion  or  rate  of  the  tax;  the  tax 
warrant,  or  statutory  provision,  in  order  to  authorize  some  person 
to  receive  the  taxes  and  to  sell  in  default  of  payment;  and  the  sale 
in  order  to  contract  the  property  to  one  who  will  pay  the  taxes  due 
upon  it.  These  are  essential  and  jurisdictional,  and  every  other 
provision  of  every  other  revenue  law  may  safely  be  said  to  be 
directory  only,  and  not  essential  to  the  exercise  of  the  taxing 
power. 

The  legislature  may  prescribe  the  time  or  manner  in  which  these 
essential  and  jurisdictional  acts  shall  be  done,  but  it  cannot,  either 
constitutionally,  or  in  the  nature  of  things,  provide  for  the  passing 
of  title  to  property  for  the  non-payment  of  taxes  without  them. 
As  to  the  time  or  manner  in  which  they  shall  be  done,  the  discre- 
tion of  the  legislature  is  absolute  and  supreme,  and  cannot  be 
judicially  controlled  or  interfered  with.  Having  the  right  to  pre- 
scribe the  manner,  it  may  also  rightfully  provide  that  a  failure  to 
comply  with  its  directions  as  to  the  manner  shall  not  defeat  the 
end;  or  that  no  person  shall  question  the  legality  of  the  manner; 
or  that  any  subsequent  fact  or  act  shall  be  either  prima  facie  or 
conclusive  evidence  that  the  law  as  to  time  or  manner  was  com- 
plied with.  In  other  words,  the  legislature  being  supreme,  may 
prescribe  the  time  and  manner  of  doing  the  act,  and  may  make 
that,  or  any  other  time  and  manner  which  the  persons  doing  it 
may  adopt,  legal  and  sufficient.  But  this  power  of  the  legislature 
extends  only  to  those  things  over  which  it  is  supreme.  As  to  the 
essential  and  jurisdictional  facts,  so  to  speak,  which  the  legislature 
cannot  annul  or  change,  it  cannot  excuse  the  non-performance  of 
them,  and,  of  course,  cannot  make  the  doing  of  any  other  thing 
a  substitute  for  them  or  conclusive  evidence  of  their  being  done. 
To  restate  the  proposition  succinctly:  whatever  the  legislature  is 
at  liberty  to  authorize  or  not,  it  may  waive  or  estop  denial;  but 
not  so  as  to  that  which  it  must  require. 

It  follows,  therefore,  upon  principle,  that  it  is  not  competent 
for  the  legislature  to  make  the  tax  deed  conclusive  evidence  of  a 
compliance  with  the  essential  prerequisites  we  have  above  named. 
That  such  an  enactment  is  in  conflict  with  the  constitutional  pro- 
vision above  quoted.  That  it  deprives  a  man  of  his  property  without 
due  process  of  law.  Not  that  the  exercise  of  the  power  of  taxation 
is  or  is  not  due  process  of  law;  but  that,  in  a  suit  between  the  tax 
purchaser,  or  his  vendee,  and  the  owner,  which  is  a  judicial  investiga- 
tion, "due  process  of  law"  means  a  trial;  and  a  trial  involves  the 
right  of  both  parties  to  produce  evidence.  If  one  party  only  is 


M'CREADY  V.  SEXTON  &  SON.  323 

allowed  to  produce  evidence,  and  the  other  is  estopped  or  con- 
cluded from  producing  his,  such  denial  is  effectually  depriving  him 
of  his  property  without  due  process  of  law.  Let  us  turn  now  to 
precedent  or.  authority. 

Judge  Oooley,  in  his  recent  and  most  excellent  "Treatise  on  Con- 
stitutional Limitations,"  says  (p.  368)  :  "But  there  are  fixed  bounds 
to  the  power  of  the  legislature  over  this  subject  (rules  of  evidence) 
which  must  not  be  exceeded.  As  to  what  shall  be  evidence,  and  who 
shall  assume  the  burden  of  proof,  its  power  is  unrestricted,  so  long 
as  its  rules  are  impartial  and  uniform;  but  it  has  no  power  to 
establish  rules,  which,  under  pretense  of  regulating  evidence,  alto- 
gether prohibit  a  party  from  exhibiting  his  rights.  Except  in  those 
cases  which  fall  within  the  familiar  doctrine  of  estoppel  at  the  com- 
mon law,  or  other  cases  resting  upon  similar  reasons,  it  would  not 
be  in  the  power  of  the  legislature  to  declare  that  a  particular  item 
of  evidence  should  preclude  a  party  from  establishing  his  rights  in 
opposition  to  it.  In  judicial  investigations,  the  law  of  the  land 
requires  a  trial;  and  there  is  no  trial  if  only  one  party  is  suffered  to 
produce  his  evidence.  A  statute  making  a  tax  deed  conclusive 
evidence  of  a  complete  title,  and  precluding  the  original  owner  from 
showing  its  invalidity,  would  therefore  be  void  as  not  a  law  regulat- 
ing evidence,  but  an  unconstitutional  confiscation  of  property. 
Groesbeck  v.  Seeley,  13  Mich.  329;  Case  v.  Dean,  16  Id.  13;  White 
v.  Flynn,  23  Ind.  46;  Smith  v.  Cleaveland,  17  Wis.  556;  Allen  v. 
Armstrong,  16  Iowa  508;  Wantlan  v.  White,  19  Ind.  470;  People  v. 
Mitchell,  45  Barb.  212." 

In  The  People  ex  rel.  etc.  v.  Mitchell  et  al.,  35  N.  Y.  55,  it  was 
held  by  a  majority  of  the  court  (three  judges  dissenting)  that  the 
legislature  might,  by  a  curative  act,  make  certain  affidavits,  taken 
under  a  previous  act,  conclusive  evidence  of  certain  facts  stated  in 
them,  notwithstanding  their  defects.  The  court  say,  that  the  purpose 
is  apparent  from  the  further  provisions,  that  "no  defects  in  any 
such  affidavits  shall  invalidate  such  proof,"  and  that  "the  bonds 
shall  be  valid  and  binding  on  said  town,  without  reference  to  the 
form  or  sufficiency  of  such  affidavits."  This  case  simply  construes 
the  curative  act,  and  holds,  in  effect,  that  the  failure  to  comply  with 
the  original  act  shall  not  defeat  the  right.  See  S.  C.  in  45  Barb.  208. 
It  was  evidently  competent  for  the  legislature  to  effect  the  result 
in  two  ways,  either  by  declaring  the  bonds  valid  and  binding,  not- 
withstanding the  failure  to  comply  with  all  the  forms  of  the  law,  or 
to  make  the  affidavits  conclusive  proof  of  compliance  therewith. 


324    CURING  DEFECTS  IN  TAX  PROCEEDINGS. 

See,  as  to  power  of  legislature  to  pass  curative  and  retroactive  laws, 
The  State  etc.  v.  Squires,  26  Iowa  340,  and  authorities  there  cited. 

The  case  of  Smith  v.  Cleaveland,  17  Wis.  55G,  appears  to  hold 
that  it  is  competent  for  the  legislature  to  make  the  tax  deed  conclu- 
sive1; but  the  opinion  expressly  states  that  "the  objections  taken,  and 
for  which  the  plaintiff  seeks  to  impeach  the  title  of  the  defendants, 
go  merely  to  the  regularity  of  the  proceedings.  The  groundwork  and 
essence  of  the  transactions  which  resulted  in  the  execution  and 
delivery  of  the  deed  remained  untouched."  It  may  he  remarked  that 
Judge  Cooley  in  his  Constitutional  Limitations,  note  to  page  369, 
cites  this  case  as  showing  how  far  "the  legislature  may  make  the  tax 
deed  conclusive  evidence  that  mere  irregularities  have  not  intervened 
in  the  proceedings."  If  the  language  of  the  opinion  goes  further  than 
this,  it  is,  as  to  such  excess,  doubtless,  but  mere  dictum.  There  is 
referred  to  in  the  opinion  and  appended  to  the  report  in  this  case  in 
the  form  of  a  note,  an  opinion  of  MILLER,  IT.  S.  district  judge  for 
the  district  of  Wisconsin,  in  the  case  of  Lord  v.  The  Milwaukee  & 
Mississippi  Eailroad  Company,  seeming  to  sustain  the  broad  lan- 
guage used  by  DIXON,  C.  J.,  in  the  main  case;  but  the  facts  in  the 
last  case  are  not  given  so  as  to  enable  the  reader  to  determine 
whether,  'as  to  its  full  extent,  it  is  adjudication  or  partly  dictum. 
But  in  the  subsequent  case  of  Smith  v.  Smith,  etc.,  19  Wis.  615, 
Dixon,  C.  J.,  in  delivering  the  opinion  of  the  court  says :  "The 
legislature  have  power  to  prescribe  the  form  of  proceedings  in  the 
assessment  and  collection  of  taxes  and,  in  matters  of  form,  may 
declare  what  steps  shall  or  shall  not  be  essential  to  the  validity  of  a 
tax  sale  or  tax  deed,"  and  cites  in  support  thereof  Smith  v.  Cleave* 
land,  supra.  In  view  of  all  the  facts  and  surroundings  of  the  case, 
we  do  not  think  it  can  be  recognized  as  deciding  that  it  is  competent 
for  the  legislature  to  make  a  tax  deed  conclusive  evidence  of  title 
or  of  a  compliance  with  the  essential  prerequisites  of  the  statute.  We 
have  selected  the  foregoing  cases,  as  being  the  strongest  found  in 
the  reports  within  our  reach,  tending  to  sustain  the  power  of  the 
legislature  to  declare  an  act  or  instrument  conclusive  evidence  of 
a  legal  right  or  title.  None  of  them  decide  in  favor  of  such  power. 
Nor  do  the  following  cases  so  decide;  but  we  have  not  space  for  an 
extended  statement  or  review  of  them:  Rhinehardt  v.  Schuyler,  2 
Gilmn.  473;  Hannel  v  .Smith.  15  Ohio  134;  The  People  etc.  v.  The 
Mayor,  etc.,  10  Wend.  398;  Gwynne  v.  Neiswanger,  18  Ohio  400; 
Steadman  v.  Planters'  Batik,  2  Eng.  (Ark.)  424. 

In  W  anil  an  v.  White,  19  Ind.  470,  which  was  a  proceeding  by 
habeas  corpus  in  behalf  of  an  enlisted  minor,  who  had  taken  the 


M'CREADY  V.  SEXTOX  &  SON.  325 

usual  oath  of  his  age.  His  discharge  was  resisted  on  the  ground 
that  the  act  of  congress  provided  that  "the  oath  of  enlistment  taken 
by  the  recruit  shall  be  conclusive  as  to  his  age."  The  court  held, 
"that  it  is  not  competent  for  the  legislative  power  to  declare  what 
shall  be  conclusive  evidence  of  a  fact."  And  in  Gavin  v.  Sherman, 
23  Ind.  32,  the  court,  in  passing  upon  a  statute  which  declared  that 
the  "tax  deed  shall  be  conclusive  evidence  of  the  truth  of  all  facts 
therein  recited,"  held,  that  it  should  be  strictly  construed;  and 
expressly  waived  deciding  the  question  whether  the  legislature  has  the 
power  to  pass  such  a  statute.  The  court  do  not  in  anyway  refer 
to  Wanttan  v.  White,  supra.  But  at  the  same  tenn,  the  court,  in  the 
case  of  White  v.  Flynn,  23  Ind.  46,  use  the  following  language: 
"The  statute  enacts  that  the  deed  shall  be  conclusive  evidence  of 
the  facts  recited,  etc.  Now,  we  do  not  suppose  the  legislature  could 
make  such  an  enactment.  See  Wantlan  v.  White,  10  Ind.  470." 

In  Groesbeck  v.  Seeley,  13  Mich.  329;  Quinlon  v.  Rogers,  12  id. 
169;  and  Case  Dean  et  al.,  16  id.  12,  a  statute  making  a  tax  deed 
conclusive  evidence  of  title  was  held  absolutely  void,  as  being  in  con- 
flict with  the  constitutional  provision  guaranteeing  due  process  of  law 
for  the  protection  of  life,  liberty  and  property. 

We  conclude,  therefore,  upon  principle  as  well  as  upon  precedent 
and  authority,  that  the  legislature  does  not  possess  the  power  to  de- 
clare the  tax  deed  to  be  conclusive  evidence  of  compliance  with  those 
matters  which  are  essential  to  the  exercise  of  the  taxing  power. 
But  as  to  the  non-essentials  or  matters  merely  directory,  such  power 
may  exist,  and  the  deed  become  conclusive  of  their  due  perform- 
ance. 

VII.  The  further  question  then  arises,  can  the  tax  deed  be 
received  as  -priina  facie  evidence  of  compliance  with  the  essential  pre- 
requisites as  to  which,  and  others  the  statute  declares  it  to  be  con- 
clusive evidence?  As  we  have  already  seen,  it  is  competent  and 
constitutional  for  the  legislature  to  make  the  tax  deed  prima  facie 
evidence  of  its  own  validity,  but  they  have  not  the  constitutional 
power  to  make  it  conclusive  evidence. 

In  this  case,  by  the  section  of  the  act  under  consideration,  the  legis- 
lature undertook  to  declare  two  things:  first,  that  the  tax  deed  should 
be  evidence  of  its  own  validity;  and  second  that  it  should  be  conclu- 
sive, that  is  that  no  evidence  should  be  received  to  contradict  it. 
This  latter  declaration,  so  far  as  it  applies  to  matters  material  and 
essential  to  the  taxing  power,  as  we  have  seen,  it  was  not  competent 


326          CUEING  DEFECTS  IN  TAX  PROCEEDINGS. 

for  the  legislature  to  do,  and  hence,  as  to  such  matters,  the  word 
"conclusive"  must  be  regarded  as  stricken  out.  The  tax  deed  would 
thereby  be  made  evidence,  but  not  conclusive  evidence  of  those  facts. 

It  follows  from  these  conclusions,  that  the  judgment  of  the  dis- 
trict court,  for  the  error  in  the  instructions  of  the  court  on  the  subject 
of  fraud,  and  the  finding  of  the  jury  thereon,  must  be  reversed. 

Reversed. 

WRIGHT,  J.,  dissenting. 

As  to  the  effect  of  tax  deeds  see  in  Chapter  XI  under  III, .Effect  of  Tax 
Deeds. 


tS  THE  MATTER  OF  THE  CONFIRMATION  OF  THE 
REPORT  OF  THE  COMMISSIONERS  OF  ASSESSMENT 
FOR  GRADING  AND  PAVING  AND  OTHERWISE  IM- 
PROVING SACKETT,  DOUGLAS  AND  DE  GRAW 
STREETS  IN  THE  CITY  OF  BROOKLYN. 

Court  of  Appeals  of  New  York.     May,  1878. 
74  New  York  95. 

EARL,  J.  The  assessment  in  question  was  laid  for  the  expense 
of  grading  and  paving  De  Graw  and  Douglas  streets,  and  for  grad- 
ing, paving,  ornamenting  and  otherwise  improving  Sackett  street, 
in  the  city  of  Brooklyn.  It  is  assailed  on  the  ground  that  the  legis- 
lation which  purports  to  authorize  the  improvements  was  unconsti- 
tutional and  void;  and  also  upon  the  ground  that  the  proceedings 
taken  under  the  laws  were  not  in  conformity  to  them  and  were 
irregular  and  unauthorized. 

It  cannot  well  be  said  that  the  Legislature  transcended  its  power 
in  the  character  of  these  street  improvements.  They  were  somewhat 
extraordinary,  and  very  expensive  and  extravagant.  They  may  have 
been  hurtful  rather  than  beneficial,  but  the  legislature  has  power 
to  determine  where  and  when  streets  shall  be  constructed,  and  their 
width  and  mode  of  improvement,  and  the  courts  cannot  sit  in  review 
upon  its  action  in  such  matters. 

Notwithstanding  the  defects  in  the  three  acts  which  have  now 
been  referred  to,  the  park  commissioners  proceeded  with  the  improve- 
ment of  the  three  street?  last  named,  and  on  the  1st  day  of  June, 


MATTER  OF  SACKETT  STKEET.  327 

1874,  had  nearly  completed  the  same.  On  that  day  an  act  was  passed 
(ch.  588),  entitled  "an  act  to  provide  for  the  completion  and  improve- 
ment of  Sackett,  Douglas  and  I)e  Graw  streets,  in  the  city  of  Brook- 
lyn, and  also  for  the  collection  and  payment  of  all  moneys  expended, 
or  indebtedness  incurred  by  said  city  on  account  of  the  improvement 
of  such  streets  by  the  Brooklyn  park  commissioners/' 

We  are  of  opinion  that  this  assessment  was  authorized  by  the  act 
of  1874,  and  that  that  act  was  a  valid  exercise  of  legislative  power. 

Section  two  of  the  act  of  1874  gives  ample  authority  to  make  the 
assessment  in  question.  Here  was  an  expense  incurred  by  public 
officers,  under  acts  supposed  to  be  valid,  in  the  improvement  of  public 
streets.  The  expense  was  to  be  either  a  tax  upon  the  whole  city  or 
upon  the  property  owners  benefitted,  and  it  cannot  be  doubted  that 
the  Legislature  had  the  power  to  determine  how  the  assessment 
should  be  made.  The  Legislature  can  adopt  and  sanction  an  improve- 
ment or  an  expenditure  which  it  could  previously  authorize.  It  may 
authorize  an  assessment  for  an  improvement,  either  before  or  after 
the  improvement  is  made,  as  in  its  judgment  is  deemed  best.  A 
complete  system  was  provided  for  the  imposition  of  the  assessment 
by  the  orderly  methods  usually  resorted  to,  and  it  is  impossible  to 
perceive  how  the  power  of  the  Legislature  to  enact  section  two  can 
be  successfully  questioned. 

I  have  thus  as  briefly  as  I  could,  and  yet  with  the  care  the  impor- 
tance of  the  case  demands,  examined  these  crude  and  imperfect  acts, 
and  I  am  of  opinion  that  none  of  the  objections  now  made  to  the 
assessment  are  well  founded  and  that  the  order  appealed  from  muit 
be  affirmed,  with  costs. 

All  concur. 

Order  affirmed. 

As  to  legislative  provision  for  reassessment,  see  note  to  Matter  of  Mr  • 
Pherson,  104  N.  Y.  306,  infra. 


328         (JUK1NG  DEFECTS  IN  TAX  PBOCEBDINGS. 

PAKISH  V.  GOLDEN. 

Court  of  Appeals  of  New  York.    September,  1866. 
So  New  York  462. 

MORGAN,  J.  There  is  an  omission  in  the  affidavit  annexed  to  the 
assessment  roll  which  is  supposed,  by  the  appellant's  counsel,  to  be 
fatal  to  the  validity  of  the  warrant  under  which  the  collector  seized 
the  plaintiff's  property.  The  statute  prescribes  a  certain  form  of 
affidavit,  and  that  form  has  been  followed  except  in  one  particular. 
The  statute  requires  the  assessors,  among  other  things,  to  make 
an  affidavit  "that  the  assessment  roll  contains  a  true  statement  of 
the  aggregate  amount  of  the  taxable  personal  estate  of  each  and 
every  person  named  in  such  roll  over  and  above  the  amount  of  debts 
due  from  each  person  respectively,  and  including  such  stocks  as  are 
otherwise  taxable  (and  such  other  property  as  is  exempt  'by  law  from 
taxation)  at  the  full  and  true  value  thereof."  (Laws  of  1851,  p.  334, 
§  8.)  The  words  omitted  are  contained  in  brackets,  and  the  question 
is,  whether  they  are  material  in  order  to  give  the  supervisors  juris- 
diction to  levy  the  tax.  For,  if  the  supervisors  had  jurisdic- 
tion to  issue  the  warrant,  this  action  cannot  be  maintained. 
According  to  the  decision  of  the  court  in  Van  Rensselaer  v.  Whitbeck 
(1  N.  Y.  517),  if  the  assessment  roll  is  not  complete  and  in  a  condi- 
tion to  be  delivered  to  the  board  of  supervisors  they  have  no  jurisdic- 
tion to  issue  a  warrant  for  the  collection  of  taxes. 

It  is  obvious,  however,  that  the  omission  of  the  assessors  to  comply 
with  an  important  provision  of  the  statute  regulating  their  duties 
cannot  be  regarded  as  a  jurisdictional  defect  without  subjecting 
public  officers  to  unnecessary  vexation  and  embarrassment.  In  my 
opinion,  the  principle  of  that  case  (Van  Rensselaer  \.  Whitbeck) 
ought  not  to  be  extended.  If  every  omission  is  to  be  regarded  as  a 
jurisdictional  defect,  then  it  is  apparent  that  the  whole  tax  is 
vitiated  wherever  such  an  omission  is  discovered.  The  supervisors, 
must  necessarily,  enter  upon  the  discharge  of  their  duties  and  examine 
the  assessment  rolls  of  all  the  towns.  Defects  in  the  assessment  rolls 
of  one  town,  or  in  the  form  of  the  affidavits  endorsed  thereon,  will 
not  have  the  effect  of  stopping  their  proceedings.  The  public  inter- 
ests require  them  to  proceed  and  make  the  necessary  corrections, 
when  it  can  be  done  without  interfering  with  the  rights  of  the  tax 
payers.  Having  entered  upon  their  duties,  I  think  it  would  be  compe- 
tent for  them  to  send  for  the  assessors  of  any  one  town  to  come 
before  them  and  supply  omissions  and  make  the  necessary  affidavits, 
where  the  omission  occurred  through  accident  or  mistake. 


PARISH  V.  GOLDEN.  329 

Now,  it  does  not  appear  in  this  case  that  the  assessors  neglected 
any  duty  imposed  upon  them  in  respect  to  the  assessment  of  the  pej> 
sonal  property  of  the  town  of  Oswegatchie.  For  aught  that  appears, 
they  excluded  from  the  valuation  such  as  was  exempt  by  law  from 
taxation.  It  does  not  appear,  affirmatively,  that  the  assessors  neglected 
any  duty  which  was  necessary  to  the  protection  of  the  rights  of  the 
tax  payers  of  Oswegatchie.  The  case  is,  therefore,  clearly  distinguish- 
able from  Van  Rensselaer  v.  Whitbeck,  where  it  appeared,  by  the  cer- 
tificate of  the  assessors,  that  they  had  estimated  the  real  estate  of  the 
town  of  Greenbush  not  according  to  its  value,  but  as  "they  deemed 
proper,"  and  the  personal  not  "according  to  their  best  information 
and  belief  of  its  value,"  "but  according  to  the  usual  way  of  assess- 
ing.'' Nothing  of  the  kind  appears  in  the  case  at  bar;  and  I  think 
it  ought  not  to  be  assumed  that  the  assessors  failed  to  make  a  legal 
estimate  of  the  valuation  of  the  property  of  the  town  of  Oswegatchie, 
for  the  purpose  of  invalidating  the  tax  warrant.  The  usual  presump- 
tion as  to  public  officers  is,  that  they  have  done  their  duty.  And  I 
am  clearly  of  the  opinion  that  the  omission  of  the  assessors  to  certify 
or  make  an  affidavit  as  to  some  particular  required  of  them  in  relation 
to  the  assessment,  is  not  to  be  regarded  as  a  jurisdictional  defect.  If 
they  have  proceeded  legally,  an  informal  certificate  or  affidavit  ought 
not  to  be  regarded  as  fatal  to  the  jurisdiction  of  the  supervisors  to 
proceed  and  levy  the  tax,  and  the  court  will  not  presume  that  the 
assessors  have  neglected  any  duty  imposed  upon  them  by  statute  from 
their  mere  omission  to  certify  it  in  their  affidavit  indorsed  on  the 
assessment  roll.  If  it  contains  substantially  the  matters  required 
by  statute,  the  defect  may  be  disregarded.  If  the  omitted  part  is 
material,  it  may  be  supplied  and  corrected.  The  proceedings  of  the 
board  of  supervisors  cannot,  I  think,  be  interrupted  by  the  neglect 
of  the  assessors  of  a  particular  town  to  make  a  formal  verification 
of  the  assessment  roll  within  the  time  limited  by  statute  for  that 
purpose;  and  if  the  duty  has  been  discharged,  the  public  interests  re- 
quire that  the  necessary  verification  should  be  allowed  to  be  subse- 
quently made.  In  case  of  willful  neglect  of  any  assessor  to  make 
the  necessary  verification,  he  will  incur  a  forfeiture  of  fifty  dollars. 
(1  E.  S.,  Edm.  ed.,  366,  §  29.)  The  object  of  the  verification  is 
to  secure  fidelity  on  the  part  of  the  officers,  and  this  may  be  en- 
forced by  a  prosecution  for  the  penalty. 

I  have  not  thought  it  necessary  to  examine  into  the  question 
whether  the  omission  of  the  assessors  to  state  in  their  affidavit  that 
they  had  excluded  from  valuation  property  exempt  by  law  from 
taxation,  was  a  mere  repetition  of  what  they  had  already  stated,  or 


330         CUEING  DEFECTS  IN  TAX  PROCEEDINGS. 

whether  it  related  to  real  or  personal  property,  or  both.  The  stat- 
ute exemption  applies  to  both  real  and  personal  estate  (1  R.  S., 
Edm.  ed.,  360,  §  4) ;  although  the  language  'of  the  affidavit  seems 
to  apply  only  to  personal  property. 

I  think  we  ought  to  place  our  decision  in  this  case  upon  a 
broader  foundation.  This  affidavit  is  in  the  nature  of  a  verification 
of  the  assessment  roll,  and  comes  in  the  place  of  a  certificate  of  the 
regularity  of  the  assessment.  (Laws  of  1851,  344,  §  8.)  The  olct 
certificate  did  not  contain  the  words  omitted  in  this  affidavit.  (1 
R.  S.,  394,  §  26.)  It  may  doubtless  be  regarded  as  repetitious,  as 
the  assessors  had  already  stated  that  the  assessment  roll  contained 
a  "true  statement  of  the  aggregate  amount  of  the  taxable  personal 
estate."  When  it  is  added  that  they  had  also  excluded  non-taxable 
property  from  their  valuation,  it  is  substantially  the  same  thing  in 
a  different  form.  But  if  it  is  a  material  statement,  the  omission  of 
it  ought  not  to  be  regarded  as  fatal  to  the  assessment  roll.  Its 
omission  is  not  evidence  that  the  assessors  have  not  performed  their 
duty  in  making  the  valuations.  It  is  like  an  informal  verification 
in  judicial  proceedings,  and,  I  think,  subject  to  correction  and 
amendment.  There  is  nothing  in  the  nature  of  the  verification 
showing  that  it  may  not  be  made  after  the  delivery  of  the  assess- 
ment roll  to  the  supervisors  as  well  as  before,  and  I  am  of  the 
opinion  that  the  duty  of  verifying  the  assessment  is  to  be  regarded 
as  directory  rather  than  jurisdictional.  (See  People  v.  Allen,  6 
Wend.  486;  Torrey  v.  Millsbury,  21  Pick.  64;  Howard  v.  Proctor, 
1  Gray  128.) 

The  judgment  should  be  affirmed. 

Concurring,  LEONARD,  PORTER  and  WRIGHT,  JJ.,  and  DAVIES, 
Ch.  J. 

HUNT,  J.,  read  an  opinion  for  reversal,  in  which  PECKHAM,  J., 
concurred. 

Judgment  affirmed. 


GIBSON   V.  BAILEY.  331 

GIBSON  V.  BAILEY. 

Superior  Court  of  Judicature  of  New  Hampshire.    July,  1838. 

9  New  Hampshire  168. 
PARKEI;,  C.  J. 

This  brings  us  to  the  proceedings  of  the  town  under  which  the 
land  was  sold  for  taxes,  and  the  proceedings  of  the  collector  in 
making  the  sale. 

And  here  it  is  admitted  that  there  are  divers  defects  which  are 
fatal  if  they  cannot  be  cured.  6  N.  H.  Rep.  182,  Props,  of  Cardi- 
gan v.  Page;  ditto  194,  Nelson  v.  Pierce. 

The  return  of  the  posting  up  of  the  warrant  for  the  town  meet- 
ing is  insufficient.  It  does  not  state  when  it  was  posted  up.  Nor 
does  it  show  that  it  was  posted  at  a  public  place. 

It  does  not  appear  that  Thirston,  who  was  chosen  collector,  took 
the  oath  of  office  prescribed  by  law. 

And  there  are  defects  in  the  return  of  the  collector,  to  which  ex- 
ceptions have  been  taken. 

The  tenants  move  that  these  proceedings  may  be  amended. 

It  has  already  been  settled  that  the  records  of  towns  may  be 
amended,  to  conform  of  the  truth  of  the  fact.  3  N.  H.  Rep.  513, 
Bishop  v.  Cone,  11  Mass.  477;  Welles  v.  Battelle,  6  N.  H.  R.  182. 

The  amendment  must  be  made  by  the  person  who  was  in  office 
at  the  time.  2  Pick.  397,  Taylor  v.  Henry. 

It  seems  probable  that  in  the  prior  cases  where  amendments  have 
been  allowed,  the  officers  who  were  permitted  to  make  them  were 
not  in  office  at  the  time;  if  they  were,  it  must  have  been  under  a 
subsequent  election,  and  the  right  to  have  the  amendment  made 
cannot  depend  upon  the  question  whether  the  officer  has  again  been 
elected. 

The  form  in  which  such  amendments  are  to  be  made,  has  never 
yet  been  settled.  It  would  be  very  dangerous  to  sanction  altera- 
tions of  the  books  themselves,  by  erasures  and  interlineations.  And 
we  are  of  opinion  that  they  should  be  made  only  upon  evidence 
showing  the  truth  of  the  facts,  and  then  by  drawing  out  in  form 
the  amendment  which  the  facts  authorize.  The  amendment,  with 
the  order  under  which  it  is  made,  may  then  be  annexed  to  the  books 
where  the  original  is  recorded,  so  that  the  whole  matter  will  appear; 
and,  in  furnishing  copies,  the  original  and  amendment  should  both 
be  furnished. 

But  it  is  objected,  on  the  part  of  the  defendant,  that  no  amend- 


332         CU1UXO  DEFECTS  IN  TAX  PROCEEDINGS. 

merit  ought  to  be  made  to  her  prejudice.  That  when  she  pur- 
chased, these  defects  in  the  vendue  title  were  apparent,  and  she 
must  be  presumed  to  have  purchased  with  knowledge  that  the  title 
was  defective. 

The  general  rule  is,  that  amendments  of  records  are  made  with  a 
saving  of  the  rights  of  third  persons,  acquired  since  the  existence 
of  the  defect.  4  N.  H.  Rep.  116,  Chamberlain  v.  Crane;  6  ditto, 
459,  Bowman  v.  Stark. 

To  apply  this  rule,  however  to  all  cases  of  defects  in  sales  of  land 
for  taxes,  would,  in  effect,  be  very  nearly  denying  a  right  to  amend; 
as  the  owner  of  the  land  sold  would  attempt  to  defeat  any  amend- 
ment, by  conveying  to  some  friend,  who  would  bring  a  suit  in  his 
behalf.  It  would,  at  least,  be  necessary  to  confine  the  application 
of  the  principle  to  cases  where  the  land  had  been  actually  conveyed 
bona  fide. 

But  instances  might  exist,  where  the  purchaser,  although  he 
might  not  have  found  upon  the  records  all  that  was  necessary  to 
make  a  formal  and  valid  record,  might  have  been  well  assured,  from 
what  he  did  find,  that  all  that  was  necessary  had  in  fact  been  done. 

For  instance,  in  relation  to  the  two  first  defects  in  the  records  in 
this  case — in  the  return  of  the  warning  of  the  meeting,  and  in  the 
record  of  the  oath  of  the  collector — although  these  records  are  not 
sufficient  in  point  of  law,  they  lead  the  mind  of  any  one  to  the 
belief  that  what  was  requisite  was  probably  done.  And-  in  such 
cases,  where  the  fact  appears  to  be  stated,  but  not  in  a  formal  man- 
ner, there  is  no  reason  that  he  who  purchases  should  not  be  sub- 
jected to  the  same  liability  to  have  the  amendment  made,  and  the 
record  put  in  form,  that  his  grantor  would  have  been,  had  he  at- 
tempted to  recover  the  land. 

There  are  cases,  where,  although  all  that  is  required  may  not  ap- 
pear of  record,  it  may  be  left  to  a  jury  to  presume  that  all  that  was 
required  was  done.  As  in  Bishop  v.  Cone — although  the  application 
of  the  principle  in  that  case  may,  perhaps,  have  been  questionable, 
on  account  of  the  transactions  having  been  so  recent,  that,  if  the 
truth  would  have  warranted  it,  an  amendment  might  have  been 
made.  Whether  that  principle  could  have  been  applied  against  a 
subsequent  purchaser,  it  is  not  necessary  to  determine.  But  where 
what  is  necessary  is,  although  not  formally  stated,  so  far  set  down 
as  to  lead  to  a  belief  that  a  correct  record  might  have  been  made, 
there  seems  to  be  no  reason  why  a  purchaser,  who  has  access  to  the 
records,  should  not  take  it  subject  to  a  right  to  have  the  record  put 
in  form,  if  the  truth  will  warrant  it. 


GIBSON  V.  BAILEY.  333 

Where,  on  the  other  hand,  nothing  appears  upon  the  record  in 
relation  to  any  particular  fact  necessary  to  make  out  a  title,  nor  is 
anything  set  down  from  which  it  is  naturally  to  be  inferred  that 
the  fact  existed,  a  subsequent  bona  fide  purchaser  ought  not  to  have 
his  title  defeated  by  supplying  a  record  instead  of  amending  a 
record. 

Upon  these  principles,  if  the  facts  will  warrant  it,  the  return  in 
relation  to  the  meeting  may  be  so  amended  as  to  show  the  time 
when  the  warrant  was  posted  up,  it  being  stated  in  the  original 
record  to  have  been  fifteen  days  before  the  meeting;  and  that  Fran- 
cis Chase's,  where  it  is  stated  to  have  been  posted,  was  a  public 
place.  So  as  to  the  record  stating  that  Thirston,  the  collector,  was 
"qualified  by  Francis  Chase,  Esq.;"  an  amendment  may  be  made, 
setting  forth  that  the  oath,  prescribed  by  law,  was  administered  to 
him  by  Francis  Chase,  a  justice  of  the  peace. 

So,  if  the  truth  will  admit  of  it,  the  return  of  the  collector,  that 
he  "proceeded  to  open  the  vendue  at  one  o'clock  P.  M.,"  etc.,  may 
be  amended,  by  stating  that  the  sale  was  closed  before  six  o'clock, 
P.  M. — and  to  the  fact,  that  it  was  struck  off  to  Gage,  may  be 
added  that  he  was  the  highest  bidder,  if  such  was  the  fact. 

We  must  first  have  evidence  to  show  that  these  amendments  may 
be  made  with  truth;  and,  if  made,  they  must  be  upon  such  terms 
as  shall  appear  to  be  just,  when  the  whole  matters  are  before  us. 

The  objection  that  the  return  of  the  collector  is  not  recorded,  but 
only  put  on  file,  cannot  avail.  N.  H.  Laws,  565. 


CHAPTER  X. 

LISTING  OF  PERSONS  AND  VALUATION  OF  ESTATES 
FOR  TAXATION. 

I.    THE  NATURE  OF  AN  ASSESSMENT. 
MATTER  OF  McPHERSON. 

Court  of  Appeals  of  New  York.    February,  1887. 
104  New  Yo~Jc  306. 

EARL,  J.  Mary  McPherson  died  in  the  city  of  Albany  on  the 
6th  day  of  February,  1886,  leaving  a  will  which  was  admitted  to 
probate  by  the  surrogate  of  Albany  county.  In  her  will  she  be- 
queathed legacies  to  various  persons  who  were  in  no  way  related  to 
her,  and  upon  the  petition  of  the  district  attorney  of  that  county 
the  surrogate  ordered  the  executors  named  in  the  will  to  pay  the 
succession  tax  imposed  by  chapter  483  of  the  Laws  of  1885.  The 
executors  and  several  of  the  legatees  appealed  from  the  decision  of 
the  surrogate  to  the  General  Term  and  from  affirmance  there  to 
this  court.  The  claim  on  the  part  of  the  appellants  is  that  the  act 
of  1885  is,  for  various  reasons,  unconstitutional  and  void,  that  the 
tax  was  not,  therefore,  lawfully  imposed,  and  that  its  collection 
and  payment  cannot  be  rightfully  enforced. 

This  tax  is  imposed  according  to  the  value  of  the  legacy  and  col- 
lateral inheritance  liable  to  be  taxed,  and  hence  there  must  be  some 
mode  of  ascertaining  that  value;  and  for  that  purpose  judicial  ac- 
tion is  requisite  at  some  stage  of  the  proceeding  before  the  liability 
of  the  taxpayer  becomes  finally  fixed.  He  must  have  some  kind  of 
notice  of  the  proceeding  against  him,  and  a  hearing  or  an  oppor- 
tunity to  be  heard  in  reference  to  the  value  of  his  property,  and 
the  amount  of  the  tax  which  is  thus  to  be  imposed.  Unless  he  has 
these,  his  constitutional  right  to  due  process  of  law  has  boen  in- 
vaded. Stuart  v.  Palmer,  74  N.  Y.  183;  County  of  San  Mateo  v. 
8.  Pac.  R.  R.  Co.,  8  Sawyer  238;  Hagar  v.  Dist.  No.  108,  111  TJ. 
S.  701.  This  act  is  assailed  as  unconstitutional  and  void  because  it 
is  claimed  it  does  not  give  the  taxpayer  such  notice  and  hearing. 

334 


MATTER  OF  McPHERSON.  335 

While  the  provision  for  notice  is  not  as  clear  and  explicit  as  it 
might  have  been,  yet  we  are  constrained  to  believe  that  it  is 
sufficient With  a  view  of  upholding  the  constitu- 
tionality of  the  act,  this  and  all  other  sections  of  the  act  must  be 
liberally  construed,  as  no  act  of  the  legislature  may  be  condemned 
as  unconstitutional,  if  by  fair  implication  or  any  just  construction 
of  its  language  it  can  be  upheld.  The  surrogate  who  has  admitted 
a  will  to  probate,  or  granted  letters  of  administration,  will  ordi- 
narily have  in  his  possession  information  as  to  the  persons  inter- 
ested in  the  estate  to  be  administered;  and  hence  this  section  im- 
poses upon  him  the  duty  of  selecting  the  persons  to  whom  notice  is 
to  be  addressed  by  the  appraisers ;  and,  as  all  persons  interested  are 
entitled  to  notice,  it  is  a  fair  inference  that  it  was  intended  that  he 
should  direct  notice  to  be  given  to  all  such  persons.  He  is  a 
judicial  officer  in  whose  court  proceedings  are  conducted  in  an  or- 
derly manner,  and  all  persons  interested  in  any  question  to  be  de- 
termined by  him  are  entitled  to  notice  and  a  hearing.  It  was 
intended  that  this  proceeding  for  the  imposition  of  a  tax  should  be 
conducted  in  an  orderly  way  as  is  required  in  other  proceedings  in 
his  court.  Therefore,  when  the  section  provides  that  he  shall  desig- 
nate by  order  to  whom  the  notice  is  to  be  given,  it  is  necessarily 
implied  that  he  shall  designate  all  the  persons  entitled  to  notice. 
If  he  should  omit  to  do  so,  it  would  be  an  error  on  account  of 
which  any  tax  imposed  upon  the  person  not  notified  or  heard  would 
be  invalid  as  having  been  imposed  without  jurisdiction. 

It  is  also  provided,  that,  immediately  after  he  has  assessed  the 
tax,  the  surrogate  shall  "give  notice  thereof  by  mail  to  all  parties 
known  to  be  interested  therein."  This  gives  a  further  opportunity 
to  the  taxpayer  to  be  heard.  Upon  receiving  the  notice,  if  he  has 
had  no  prior  notice  or  hearing,  he  may  apply  to  the  surrogate  and 
ask  for  one,  and  it  would  be  his  duty  to  grant  it.  The  proceeding 
is  in  court  before  a  judicial  officer  and  whatever  a  taxpayer  can 
ask  as  a  matter  of  constitutional  right,  it  is  the  duty  of  the  sur- 
rogate to  grant. 

Then  there  is  the  right  of  appeal  provided  for  in  the  same  sec- 
tion. Any  person  dissatisfied  with  the  appraisement  or  assessment 
may  appeal  therefrom  to  the  surrogate  of  the  proper  county,  on 
paying  or  giving  security  to  pay  all  costs  and  the  tax  as  fixed  by 
the  court.  Upon  such  appeal  there  is  another  opportunity  to  be 
heard.  The  appeal  is  not  limited  to  questions  of  law,  but  may  be 
taken  to  the  surrogate  upon  both  the  facts  and  the  law,  and  he  has 
ample  power  to  correct  any  error  brought  to  his  attention.  For  the 


336  LISTING  OF  PEKSONS  AND  VALUATION. 

purpose  of  making  such  correction,  he  is  not  bound  by  the  estimate 
of  the  appraisers,  or  by  the  facts  which  appear  before  him;  but  he 
may  hear  such  new  evidence  and  allegations  as  may  be  properly 
presented  to  him. 

So,  in  all  of  these  modes  we  think  there  is  sufficient  provision  for 
notice  and  hearing  for  all  parties  interested  in  the  tax,  and  we  have 
no  doubt  that  the  act  secures  to  every  taxpayer  due  process  of  law 
so  far  as  it  is  applicable  to  cases  of  taxation. 

It  is  also  objected  that  the  act  confers  powers  upon  surrogates' 
courts  not  authorized  by  and  contrary  to  the  Constitution.  There 
is  nothing  in  the  Constitution  which  in  any  way  specifies  or  defines 
the  powers  or  duties  of  surrogates.  They  are  recognized  in  vari- 
ous sections  of  the  Constitution  and  they  have  been  known  to  the 
laws  of  the  State  since  the  foundation  of  our  government.  Their 
jurisdiction  has  been  from  time  to  time  defined  in  the  statutes,  and 
from  time  to  time  extended  and  enlarged.  Surrogates'  courts  have 
always  had  jurisdiction  of  the  administration,  adjustment  and  settle- 
ment of  the  estates  of  deceased  persons,  and  the  imposition  and  col- 
lection of  this  tax  are  simply  incidents  in  the  final  settlement  and 
adjustment  of  such  estates,  and  are  in  no  way  foreign  to  the  juris- 
diction which  has  generally  been  exercised  by  such  courts,  certainly 
not  so  foreign  as  to  make  the  act  obnoxious  to  any  constitutional 
objection. 

We  are,  therefore,  of  opinion  that  there  is  no  constitutional  ob- 
jection to  this  act  which  affects  this  case,  and  that  the  judgment 
should  be  affirmed  with  costs. 

All  concur  except  KAPALLO,  J.,  not  voting. 

Judgment  affirmed. 

See  also  county  of  San  Mateo  v.  South  Pac.  R.  Co.  13  Fed.  Repr.  722 
Supra.  See  as  to  license  and  privilege  taxes,  McMillen  v.  Anderson,  95  U. 
S.  37  Infra.  See  also  Dollar  Savings  Bank  v.  United  States,  19  Wallace  227. 
The  legislature  may  constitutionally  provide  for  reassessment  where  original 
assessment  was  invalid  or  incomplete.  Sturges  v.  Carter  114  U.  S.  511 ;  Gal- 
lup v.  Schmidt,  183  U.  S.  300. 


CITY  OF  TAMPA  V.  KAUNITZ.  337 

CITY  OF  TAMPA  V.  KAUNITZ. 

Supreme  Court  of  Florida.    June,  1897. 
39  Florida  683. 

CARTER,  J. 

The  assignments  of  error  complain,  first,  that  the  court  erred  in 
overruling  the  demurrer  to  the  petition;  second,  that  the  court 
erred  in  declaring  the  assessment  of  petitioner's  property  unlawfully 
made. 

1.  We  think  a  proper  consideration  of  all  substantial  questions 
suggested  by  the  demurrer  to  the  petition  can  be  had  by  ascertain- 
ing (A)  whether  the  assessment  for  taxes  of  1896  was  void  be- 
cause made  by  Biglow,  instead  of  the  auditor  of  the  city  of  Tampa. 

A.  We  think  the  first  question  must  be  answered  affirmatively. 
Section  4,  Chapter  4496,  approved  May  29,  1895,  being  the  pres- 
ent charter  of  the  city  of  Tampa,  provides  that,  "the  government  of 
said  city  shall  be  carried  on  by  the  following  officers :..... 
auditor  who  shall  be  the  assessor  of  taxes." 

By  section  10  it  is  provided  that  the  mayor  shall,  by  and  with 
the  consent  of  the  city  council,  appoint  some  suitable  person  to  be 
called  the  auditor  of  said  city,  who  shall  give  such  bond  as  the 
council  may  direct  and  whose  duty  and  compensation  shall  be  fixed 
by  ordinances,  except  as  herein  provided.  Section  31  makes  it  tho 
duty  of  the  tax  assessor  of  the  city,  between  April  1st  and  July  1st 
of  each  year,  to  ascertain  by  diligent  inquiry  all  taxable  personal 
property  and  all  taxable  real  estate  in  the  city  and  the  names  of 
the  persons  owning  the  same  on  April  1st  in  each  year,  and  to 
make  an  assessment  of  all  taxable  property.  It  requires  him  to 
visit  and  inspect  all  real  estate  and  affix  a  valuation  thereon,  and 
he  is  to  require  the  owners  of  personal  property  to  return  and  value 
same  under  oath,  which  he  is  authorized  to  administer,  and  any 
person  refusing  to  make  such  oath  is  not  permitted  afterward  to 
reduce  the  valuation  of  such  personal  property  for  that  year.  By 
section  34  the  assessor  is  required  to  value  all  personal  property  not 
returned  under  oath  according  to  his  best  judgment  and  informa- 
tion. Other  provisions  of  the  charter  require  the  assessor  to  make 
out  assessment  rolls  in  the  manner  specified  therein,  to  meet  with 
the  city  board  of  equalization  on  the  first  Monday  in  July  of  each 
year,  for  the  purpose  of  reviewing  the  assessment  rolls,  to  calculate 
22 


338          LISTING  OF  PERSONS  AND  VALUATION. 

and  carry  out  the  several  amounts  of  taxes,  after  the  amount  to  be 
raised  has  been  determined,  and  after  completing  the  rolls  to  append 
to  them  an  affidavit  as  to  the  correctness  of  the  rolls  and  of  the 
valuations  of  property  made  by  him,  and  to  issue  and  attach  to  the 
original  roll  a  warrant  in  the  form  prescribed  by  section  38,  com- 
manding the  tax  collector  to  collect  the  taxes  therein  by  sale  of 
the  assessed  property.  The  charter  of  the  city  having  expressly 
committed  these  duties  relating  to  the  assessment  of  taxes  to  the 
auditor,  the  city  had  no  power  to  transfer  them  to  any  other  per- 
son. City  of  Tampa  v.  Salomonson,  35  Fla.,  446,  17  South.  Eep. 
581.  We  do  not  understand  that  the  resolution  of  the  city  council, 
referred  to  in  the  petition,  undertook  to  transfer  the  duties  of  tax 
assessor  from  the  auditor  to  the  persons  authorized  to  be  employed 
by  the  finance  committee.  The  persons  so  employed  were  merely 
assistants  to  the  auditor  in  making  the  assessment.  No  new  office 
was  attempted  to  be  created  by  this  resolution,  nor  did  the  resolu- 
tion attempt  to  authorize  the  employee  to  make  the  assessment  ex- 
clusively of  the  auditor.  Biglow,  the  employee  under  this  resolution, 
did  not  pretend  to  be  the  rightful  auditor  or  assessor  of  the  city. 

He  was  a  mere  employee  of  the  council,  having  and 

claiming  no  other  or  higher  rights  or  duties  than  those  of  an  as- 
sistant to  the  auditor  in  the  matter  of  making  city  assessments  of 
taxes.  Biglow  was  not,  therefore,  an  officer  de  facto  whose  acts  as 
such  would  be  valid  as  to  third  persons,  as  was  the  case  in  the  Town 
of  Kissimmee  City  v.  Cannon,  26  Fla.  3,  7  South.  Rep.  523.  .  . 
.  .  We  think  it  is  absolutely  essential  to  the  validity  of  a  tax 
levy,  that  the  assessment  be  made  by  the  officer  authorized  by  law 
to  make  it.  The  person  making  the  assessment  must  be  that  officer, 
either  de  jure  or  de  facto.  We  do  not  mean  to  intimate  that  the 
officer  must  personally  perform  every  act  connected  with  the  assess- 
ment and  the  making  of  the  tax  roll.  Many  of  these  acts  are  of  a 
clerical  nature,  involving  no  exercise  of  discretion,  and  having  no 
relation  to  any  right  of  the  tax  payer.  A  very  large  portion  of  these 
duties  consists  in  transcribing  upon  the  rolls  the  various  assess- 
ments, and  in  calculating  the  amounts  of  taxes  levied  thereon.  The 
assessor  may  call  to  his  assistance  the  services  of  other  persons, 
whether  officers  or  not,  in  the  performance  of  all  clerical  or  minis- 
terial duties,  and  the  assessment  will  not  be  invalid  for  that  reason 
if  the  work  of  the  others  is  done  under  his  supervision,  or  is  ratified 
or  adopted  by  him. 

But  if  the  assessor,  either  from  neglect  or  because  of  other  press- 
ing duties  devolving  upon  him,  permits  his  assistants  to  perform 


FELSENTHAL  ET  AL.  V.  JOHNSON.  339 

all  the  duties  relating  to  the  assessment  for  a  whole  tax  year,  while 
he  abstains  from  any  duty  connected  therewith,  an  assessment  so 
made  will  be  utterly  void,  and  it  is  the  duty  of  the  courts  to  so  de- 
clare it.     The  reasons  are  succinctly  stated  by  Mr.  Blackwell  (Tax 
Titles,  vol.  1,  sec.  168)  as  follows:    "The  statute  being  the  author- 
ity, and  the  officer  the  agent  to  execute  it,  and  no  one  being  em- 
powered to  do  the  act  except  the  persons  specially  designated  in  the 
law  for  that  purpose,  it  follows  that  a  stranger  to  the  power  cannot 
execute  it.     The  power  is  conferred  upon  the  officer,  not  the  man. 
It  is  an  official,  not  a  personal  trust.     It  does  not  rest  upon  confi- 
dence, but  upon  official  responsibility.     Hence  the  only  security  of 
the  proprietor  of  the  estate  is  the  official  character  of  the  person  to 
whom  the  power  is  committed.     This  security  mainly  depends  upon 
the  responsibility  of  the  officer  to  the  government,  the  sanctity  of  his 
oath  of  office,  and  his  liability  to  those  whose  rights  are  violated  by 
his  wrongful  acts.     .....     The  citizen  is  entitled  to  all  the 

protection  against  fraud,  rapacity,  and  abuse  of  authority,  in  the 
sale  of  his  property,  which  official  responsibility  can  secure."  The 
petition  distinctly  avers  that  the  auditor  or  assessor  performed  no 
"duties  whatever  connected  with  the  assessment  of  taxes  for  the 
city  of  Tampa  during  the  year  1896;"  that  "the  said  assessment 
was  made  by  the  said  Biglow  exclusively  and  that  the  legal  assessor 
of-  the  city  of  Tampa  had  nothing  whatever  to  do  with  the  assess- 
ment aforesaid."  If  these  allegations  are  true,  the  assessment  of 
petitioner's  personal  as  well  as  real  property  was  void. 


FELSENTHAL  ET  AL.  V.  JOHNSON. 

Supreme  Court  of  Illinois.     September,  1882. 
104  Illinois  21. 

Mr.  Justice  WALKER  delivered  the  opinion  of  the  Court: 
This  was  a  bill  filed  to  restrain  the  collection  of  taxes  levied  for 
State,  county  and  local  purposes,  for  the  year  1878,  against  appel- 
lants, as  private  bankers.  They  furnished  the  assessor  with  a  list 
of  what  they  claim  was  all  of  the  property  in  their  hands  subject  to 
taxation.  The  assessor  subsequently  notified  them  to  appear  on  a 
specified  day,  for  the  purpose  of  fixing  the  assessable  amount  of 
their  property.  One  of  the  members  of  the  firm  applied  at  the 


340  LISTING  OF  PERSONS  AND  VALUATION. 

office  of  the  assessor  at  the  time  named,  and  submitted  to  an  exam- 
ination as  to  the  taxable  property  in  their  hands.  The  valuation 
was  not  then  fixed.  One  of  the  appellants  says  he  asked  if  his 
explanation  was  satisfactory,  when  the  assessor  replied  he  would  let 
him  know,  but  never  gave  him  any  notice. 

The  assessor  fixed  the  value  of  the  property  at  a  much  larger  sum 
than  it  was  returned  by  appellants,  and  it  is  claimed,  and  there  is 
evidence  tending  to  show,  appellants  were  not  notified  of  the  amount 
of  the  valuation.  The  hearing  before  the  assessor  was  on  the  13th 
day  of  August,  1878.  Felsenthal  swears  he  accidentally  learned  that 
the  assessor  had  fixed  the  value  higher  than  he  had  returned  it, 
some  days  after,  while  the  county  equalizing  board  was  in  session. 
and  that  he  filed  with  the  clerk  of  the  board  of  commissioners  ob- 
jections to  the  amount  fixed  by  the  assessor,  and  that  the  clerk  said 
to  him  he  would  inform  him  when  it  would  be  necessary  to  testify  be- 
fore the  board.  The  clerk  testifies  that  he  has  no  recollection  of 
the  matter,  nor  does  the  record  show  anything  in  reference  to  it. 
He  says  he  directed  parties  to  file  the  objections  with  the  committee 
on  equalization,  etc.,  which  was  in  daily  session;  that  the  commit- 
tee, when  it  acted  on  objections,  usually  returned  the  papers  to  him, 
and  he  filed  them,  but  was  unable  to  find  any  as  to  this  assessment. 
Felsenthal  testifies  the  clerk  informed  him  the  committee  referred 
the  objections  back  to  the  assessor,  but  the  clerk  does  not  sustain 
him  in  this.  It  is  not  claimed  that  appellants,  or  any  one  of  them, 
appeared  before  the  committee  to  obtain  a  reduction  or  to  have  the 
claim  of  over-assessment  corrected.  No  other  steps  were  taken  than 
what  is  claimed  above.  On  the  hearing  the  court  below  dismissed 
the  bill,  and  appellants  seek  to  reverse  that  decree. 

In  matters  of  revenue,  courts  of  equity  rarely  grant  relief,  and 
never  where  the  party  has  means  of  obtaining  relief  at  law,  and 
fails  or  refuses  to  pursue  his  legal  remedy,  or  shows  an  equitable 
excuse  for  such  failure.  The  statute  has  provided  ample  means  for 
the  correction  of  errors  in  assessments  of  property  for  taxation,  by 
an  appeal  to  the  town  board  of  review,  and  again  to  the  county 
board.  These  appeals  are  provided  for  and  regulated  by  the  86th 
and  97th  sections  of  the  Eevenue  law.  The  first  provides  that  prop- 
erty assessed  as  this  was,  after  the  fourth  Monday  of  June,  the  time 
for  the  meeting  of  the  town  board  of  review,  shall  be  subject  to 
complaint  to  the  county  board,  under  the  rules  regulating  the  town 
board  of  review.  The  97th  section  provides  there  shall  be  a  meet- 
ing of  the  county  board  on  the  second  Monday  of  July  in  each  year, 
and  on  the  application  of  any  person  considering  himself  aggrieved, 


FELSENTHAL  ET  AL.  V.  JOHNSON.  341 

"they  shall  review  the  assessment,  and  correct  the  same  as  shall 
appear  to  be  just."  The  statute  thus  provides  ample  means  for  all 
grievances  in  the  assessment  of  property  for  taxation,  whether  hy 
over-valuation,  or  by  imposing  the  assessment  on  property  not  sub- 
ject to  taxation,  or  on  property  not  owned  or  liable  to  be  assessed 
to  the  tax-payer.  It  embraces  every  kind  of  grievance  in  the  as- 
sessment; and  even  where  there  is  a  supposed  grievance,  the  tax- 
payer has  but  to  appear,  make  his  complaint  known,  and  have  a 
hearing.  If  appellants  felt  themselves  aggrieved  they  had  but  to 
appear  and  state  their  complaint,  and  be  heard.  This  they  failed 
to  do,  and  so  failing,  chancery  will  not  assume  jurisdiction  to  re- 
view the  assessment.  They  failed  to  pursue  their  remedy  at  law, 
and  can  not  appeal  to  equity  for  relief  against  their  own  neglect. 

It  is  urged  that  relief  should  be  granted  under  the  equity  head 
of  accident.  We  fail  to  see  that  there  was  any  accident.  Appellants 
knew  the  amount  of  the  assessment  in  time  to  appeal  to  the  county 
board  to  have  it  corrected.  They  knew  that  the  board  was  in  ses- 
sion, and  they  failed  to  attend  and  prove  there  was  an  over-assess- 
ment. Although  the  assessment  was  made  too  late  for  an  appeal  to 
the  town  board  of  review,  it  was  in  time  for  a  review  by  the  count}' 
board,  and  they  were  apprised  of  the  fact,  and  made  some  slight 
effort  to  bring  the  matter  before  the  board.  Felsenthal  testifies  he 
filed  objections  with  the  clerk,  who  promised  to  notify  him  when  he 
should  appear  before  the  board  to  testify.  If  he  constituted  the 
clerk,  as  he  says,  his  agent,  and  the  clerk  failed  to  notify  him,  the 
neglect  of  his  agent  was  his,  and  he  must  be  held  responsible  for 
that  neglect.  Xo  such  accident  is  shown  as  equity  regards  as  ground 
for  relief.  To  entitle  a  party  to  equitable  relief  when  he  has  not 
availed  of  his  legal  remedy,  he  must  have  used  every  reasonable 
effort  to  have  employed  it. 

It  is  urged  that  the  assessor,  without  notice  or  hearing,  changed 
the  assessment  of  appellants'  property,  and  this  is  ground  for  equita- 
ble relief,  and  decisions  of  this  court  are  cited  in  support  of  the 
doctrine.  The  authorities  have  no  application,  because  the  record 
fails  to  show  that  such  a  change  was  made  by  the  assessor.  There 
was  but  one  assessment  on  his  books,  and  that  was  made  after  one 
of  appellants  submitted  to  the  examination  on  the  13th  day  of 
August.  The  assumption  seems  to  be  that  the  schedule  returned  by 
appellants  was  the  assessment,  and  that  the  larger  sum  placed  on 
the  assessor's  books  was  an  alteration  of  the  assessment.  This  is 
not  true.  The  assessor,  and  not  the  tax-payer,  makes  the  assessment. 
The  latter  is  required  to  make  and  return  the  schedule  to  enable 


342  LISTING  OF  PERSONS  AND  VALUATION. 

the  assessor  to  perform  the  duty  of  assessing  the  value  of  the  prop- 
erty. Until  the  assessor  approves  the  schedule,  or  makes  a  new  one 
and  fixes  the  valuation  of  the  property,  there  is  no  assessment.  The 
act  is  official,  and  must  be  performed  by  the  assessor.  It  is  his 
judgment,  and  not  that  of  the  tax-payer,  that  controls.  We  fail  to 
find  that  the  valuation  of  this  property  was  ever  changed  after  it 
was  fixed  by  the  assessor,  whose  duty  it  was  to  fix  the  amount.  The 
cases  therefore  have  no  application  to  the  facts  in  this  case.  Ap- 
pellants objected  that  the  value  was  placed  at  too  large  a  sum.  The 
assessor's  valuation  is  presumed  by  the  law  to  be  correct,  and  it  de- 
volves upon  the  taxpayer  to  overcome  that  presumption  by  proof. 
He  offered  no  proof  to  establish  that  objection.  He  did  not  appeal- 
before  the  committee  and  have  a  time  fixed  for  a  hearing,  nor  did 
he  do  any  act  to  have  his  evidence  heard.  He  could  have  availed  of 
the  means  of  learning  when  he  could  be  heard  by  the  committee. 

There  is  no  evidence  that  the  committee  referred  this  objection 
back  to  the  assessor.  It  only  appears  that  the  clerk  informed  one 
of  appellants  that  there  was  such  action  by  the  committee.  It  was 
but  hearsay  evidence,  at  most.  If  such  was  the  action,  we  presume 
it  appears  of  record  somewhere,  or  there  was  legitimate  evidence  of 
the  fact,  and  could  have  been  produced.  But  if  the  evidence  had 
been  heard,  we  do  not  determine  now  whether  it  would  constitute 
ground  for  relief. 

The  decree  of  the  court  below  is  affirmed. 

Decree  affirmed. 

But  see  Moors  v.  Street  Comrs.  134  Mass.  431,  where  it  is  held  that  the 
assessment  may  not  be  raised  without  giving  the  taxpayer  opportunity  to 
be  heard,  nor  except  as  provided  by  the  statute.  Under  some  statutes 
assessors  may  raise  on  evidence  not  submitted  to  taxpayer.  Kansas,  etc., 
R.  R.  Co.  v.  Ellis  Co.,  19  Kan.  584.  If  by  mistake  the  taxpayer  includes  in  hre 
list  exempted  property  he  is  not  concluded  by  his  list  but  may  subsequently 
claim  an  abatement  as  to  exempted  property.  Charlestown  v.  County  Corns. 
109  Mass.  270. 

Often  a  heavy  penalty  is  imposed  for  neglect  to  make  a  return.  These 
penalties  are  usually  upheld — See  Drexel  v.  Commonwealth,  46  Pa.  St.  31 
Supra.  See  also  Porter  v.  Co.  Corns.  5  Gray  365 :  Ex  parte  Lynch,  16  S.  C. 
32;  W.  U.  Tel.  Co.  v.  Indiana,  165  U.  S.  304;  Caldwell  v.  State,  14  Texas 
Appeals,  171. 


MATTER  OF  CAGEE.  343 


MATTER  OF  CAGER. 

Court  of  Appeals  of  New  York.    November,  1888. 
Ill  New  York,  843. 


We  are  thus  brought  to  the  only  question  in  the  case,  which  is, 
whether  the  children  of  Mary  Griffin  took  such  an  interest  in  the 
property  devised  by  the  will  of  William  Cager  as  subjected  them  to 
the  payment  of  a  tax  thereon  by  force  of  the  acts  referred  to?  This 
question  is  to  be  determined  by  a  consideration  of  the  provisions 
of  that  will.  The  portions  affecting  the  question  read  as  follows: 

"First.  After  all  my  lawful  debts  are  paid  and  discharged,  I 
give,  devise  and  bequeath  all  my  estate,  both  real  and  personal,  of 
what  nature  and  kind  soever,  to  my  wife,  Mary  Cager,  to  be  used 
and  enjoyed,  and  at  her  disposed  during  the  term  of  her  natural 
life. 

"Secondly.  I  give  and  devise  one-third  of  my  real  estate  and 
personal  property,  that  may  remain  at  the  decease  of  my  wife  Mary 
Cager,  to  my  adopted  daughter  Mary  Griffin,  that  is  to  say,  the  use 
of  the  said  one-third  during  her  natural  life. 

"Thirdly.  I  further  devise  and  bequeath,  at  the  decease  of  my 
wife  Mary  Cager,  the  remaining  two-thirds  of  my  real  estate  and 
personal  property  to  the  present  heirs  of  the  aforesajd  Mary  Griffin, 
namely,  Eva  Griffin,  William  C.  Griffin,  Frank  Griffin  and  George 
Griffin,  share  and  share  alike. 

"I  further  devise  and  bequeath,  that  at  the  decease  of  my  adopted 
daughter  Mary  Griffin,  the  one-third  (as  above  stated)  of  which  she 
has  had  the  use,  shall  be  divided  between  the  present  heirs  of  afore- 
said Mary  Griffin,  share  and  share  alike." 

The  report  of  the  appraiser,  appointed  by  the  surrogate  to  ap- 
praise the  value  of  the  property  devised  to  the  various  legatees, 
shows  that  he  assessed  the  value  of  the  estate  devised,  respectively, 
to  the  children  of  Mary  Griffin,  upon  two  theories,  leaving  the  ques- 
tion to  the  surrogate'  to  determine  upon  which  theory,  if  any,  the 
tax  should  be  assessed.  Upon  the  theory  that  the  widow  took  a  life 
estate  only  in  the  property,  he  found  the  value  of  that  devised  to 
the  several  children  of  Mary  Griffin  to  be  the  sum  of  $640.96  each; 
but  in  case  the  interest  devised  to  the  widow  was  an  estate  in  fee, 
or  a  life  estate  with  power  of  disposition,  he  was  of  the  opinion  that 
such  legacies  had  no  market  value  whatever. 


344  LISTING  OF  PEHSONS  AND  VALUATION. 

The  surrogate  adopted  the  former  view  and  assessed  the  value 
at  the  sum  named  by  the  appraiser.  In  this  we  think  he  erred.  We 
are  of  the  opinion  that  the  widow  took  a  life  estate  in  the  property 
devised  with  a  limited  power  of  disposition  for  her  use  and  enjoy- 
ment, and  that  any  interest  in  the  other  legatees  was  dependent 
upon  the  contingency  whether  the  power  of  disposition  was  exercised 
by  the  life  tenant  during  her  life.  The  meaning  and  effect  of  the 
will  must  be  sought  in  the  language  employed  by  the  testator,  and 
when  that  is  discovered,  must  be  carried  into  effect  by  the  court. 

The  language  giving  all  of  his  estate  to  his  widow,  to  be  used 
and  enjoyed  and  at  her  disposal,  followed,  as  it  is,  by  a  limitation 
over  of  such  of  the  estate  as  might  remain  at  the  decease  of  his 
wife,  clearly  imports  an  intention  to  confer  upon  the  widow  the 
power  to  dispose  of  the  corpus  of  the  estate.  (Van  Home  v.  Camp- 
bell, 100  N.  Y.  287;  Smith  v.  Van  Ostrand,  64  id.  278;  Terry  v. 
Wiggins,  47  id.  512.) 

We  think,  however,  that  the  power  of  disposition  given  to  the 
widow  was  not  intended  to  be  absolute  and  unconditional,  but  was 
limited  by  the  language  devising  the  property,  for  her  use  and  en- 
joyment during  her  life,  and  did  not  give  her  the  power  of  dispos- 
ing of  it  by  will.  This  limitation,  therefore,  operated  as  a  restraint 
upon  the  power  of  alienation,  and  prevented  the  estate  devised  to 
her,  from  being  defined  as  an  absolute  estate  in  fee. 

The  devises,  therefore,  to  Mary  Griffin  and  her  children  were  not 
in  any  sense  repugnant  to  the  prior  estate,  and  may  be  sustained  a? 
valid  executory  devises.  Authorities  supra.  The  effect  of  these 
conclusions  is  to  destroy  the  basis  upon  which  the  surrogate  pro- 
ceeded in  imposing  the  tax  and  justified  the  reversal  of  his  order. 
While  it  is  possible  that  the  legatees  may  eventually  take  a  valuable 
estate,  under  the  will  of  William  Cager,  that  event,  being  contin- 
gent upon  the  non-exercise  by  his  widow  of  the  power  of  disposi- 
tion, renders  the  present  appraisable  value  of  such  interest  incapa- 
ble of  any  correct  or  reasonably  approximate  valuation.  When  the 
present  value  of  property,  which  is  devised  to  one  with  a  limita- 
tion over  to  others,  upon  the  happening  of  some  event  which  may  or 
may  not  occur,  can  be  ascertained,  then  a  ground  upon  which  an 
approximate  estimate  of  the  value  of  the  ultimate  devise  appears, 
and  it  may  be  made;  but  when  the  question  as  to  whether  any  prop- 
erty at  all  shall  pass  under  the  limitation  over,  and,  if  so,  "how 
much,  depends  upon  the  will  of  the  first  taker,  we  are  unable  to 
see  any  rule  by  which  such  value  can  be  determined. 

In  the  case  first  mentioned,  the  act  enables  a  tax  to  be  imposed 


MYGATT  V.  WASHBURN.  345 

and  collected  upon  the  ulterior  devisees,  through  the  medium  of  a 
bond  to  be  given  by  the  respective  legatees,  payable  when  they  come 
into  the  possession  of  the  devised  property.  §  2  chap.  483,  Laws  of 
1885.  In  the  latter  case,  however,  there  is  no  basis  upon  which  the 
value  of  the  devise  can  be  appraised,  and  no  foundation  for  the  im- 
position of  any  tax  and  the  provision  for  the  giving  of  a  condi- 
tional bond  is,  therefore,  wholly  inapplicable. 

Whether  an  appraisal  of  the  value  of  these  devises,  for  the  pur- 
pose of  taxation,  may  be  made  when  they  eventually  come  to  the 
possession  of  the  devisees,  we  are  not  called  upon  now  to  determine. 
It  may  be  that  the  tax  will  be  altogether  lost  to  the  State  if  an 
appraisal  is  not  now  allowed;  but  if  so,  the  fault  lies  in  the  act 
itself  and  not  in  the  construction  which  its  language  requires  to  be 
put  upon  it. 

The  order  of  the  General  Term  should,  therefore,  be  affirmed. 

All  concur. 

Order  affirmed. 

Where  the  amount  of  the  legacy  is  fixed  the  transfer  is  taxable  even  if  the 
legatee  is  contingent,  Matter  of  Vanderbilt,  172  N.  Y.  69.  But  the  life  estate 
and  remainder  are  separate  and  neither  is  to  be  affected  by  the  tax  on  the 
other.  Commonwealth's  Appeal,  127  Pa.  St.  435. 

It  has  been  held  under  some  statutes  that  a  remainder  is  not  taxable 
until  the  death  of  the  life  tenant.  Nieman's  Estate  131  Pa.  St.  341;  Van- 
derbilt v.  Eidman,  196  U.  S.  480. 


MYGATT  V.  WASHBURN. 

Court  of  Appeals  of  New  York.    June  1857. 
15  New  York,  316. 

DENIO,  C.  J.  The  act  relating  to  the  assessment  of  taxes  requires 
that  every  person  shall  be  assessed  in  the  town  or  ward  where  he 
resides  when  the  assessment  is  made,  for  all  personal  estate  owned 
by  him.  (1  R.  S.,  389,  §  5.)  As  the  plaintiff  resided  in  Oxford, 
during  a  portion  of  the  year  of  1846,  and  changed  his  residence  to 
Oswego  while  the  procedings  to  make  out  the  assessment  for  that 
year  were  going  on,  it  becomes  necessary  to  ascertain  when,  in  the 
course  of  these  proceedings,  the  assessment  shall  be  said  to  be  made. 
...  In  my  opinion  the  assessment  should  be  considered 
as  made  at  the  expiration  of  the  time  limited  for  making  the  in- 
quiry, namely,  on  the  first  day  of  July.  If  there  is  any  change,  of 
residence  or  in  the  ownership  of  the  property,  after  that  day,  it 


346  LISTING  OF  PEKSONS  AND  VALUATION. 

does  not  affect  the  assessment  roll.  The  inquiries  are  then  com- 
pleted. Any  changes  which  the  assessors  are  authorized  to  make 
after  that  time,  are  such  as  may  be  required  to  correct  mistakes. 
No  earlier  day  can  be  assumed,  because  what  is  done  by  one  or  all 
the  assessors  prior  to  the  first  of  July  is  inchoate  and  preparatory, 
and  liable  to  be  altered  according  to  their  final  judgment  on  the 
matter.  When  the  statute  speaks  of  the  time  "when  the  assessment 
is  made"  it  refers  to  the  binding  and  conclusive  act  which  desig- 
nates the  tax  payers  and  the  amount  of  taxable  property.  If  I  am 
•correct  in  what  has  been  said,  it  follows  that  the  time,  referred  to 
in  the  statute,  is  the  first  day  of  July.  It  cannot  be  an  earlier 
or  a  later  day  without  involving  incongruities  which  we  cannot  sup- 
pose the  legislature  would  have  permitted  to  exist 

The  plaintiff,  therefore,  was  not  subject  to  the  jurisdiction  of  the 
assessors.  In  placing  his  name  on  the  roll,  and  adding  thereto  an 
amount  as  the  value  of  his  personal  property,  they  acted  without 
authority.  As  the  board  of  supervisors  was  obliged  by  law  to  annex 
a  tax  to  the  name  of  every  person  assessed  upon  the  roll,  and  to 
issue  a  warrant  for  the  collection  of  the  tax,  the  unauthorized  act 
of  the  assessors  was  the  means  by  which  the  property  of  the  plain- 
tiff was  procured  to  be  sold.  They  are,  therefore,  responsible  to  the 
plaintiff  for  the  damages  which  ensued.  It  was  not,  in  the  view  ot 
the  law,  the  case  of  an  error  of  judgment.  It  is  a  salutary  rule, 
though  in  some  cases,  and  perhaps  in  the  one  before  us,  it  may  oper- 
ate harshly,  that  a  subordinate  officer  is  bound  to  see  that  he  acts 
within  the  scope  of  the  authority  legally  committed  to  him.  The 
principle  is  too  well  settled  to  require  a  reference  to  authority;  but 
its  application  to  the  case  of  assessment  of  a  person  not  liable  to 
taxation  in  the  town  or  district  in  which  the  assessment  is  made  has 
often  been  declared  in  the  courts  of  this  and  other  states.  (Suy~ 
dam  v.  Keys,  13  John.,  444;  Prosser  v.  Secor,  5  Barb.,  607;  People 
v.  The  Supervisors  of  Chenango  County,  1  Kern,  573;  Freeman  v. 
Kenney,  15  Pick.,  44;  Lyman  v.  Fiske,  17  id.,  231.) 

The  judgment  of  the  Supreme  Court  should  be  affirmed. 
All    the    judges    concurred    in    affirming    the    judgment,    except 
SHANKLAND,  J.,  who  dissented. 

Judgment  affirmed. 


CHAMBERLAIN  V.  FORREST.         347 

PEOPLE  EX  REL.  CHAMBERLAIN  V.  FORREST. 

Court  of  Appeals  of  New  York.     October,  1884. 
96  New  York,  644. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court,  in  the  fourth  judicial  department,  entered  upon  an  order 
made  June  23,  1883,  which  affirmed  a  judgment  of  Special  Term, 
reducing  an  assessment  made  upon  the  relator  as  trustee,  etc. 

This  was  a  proceeding  by  a  certiorari  under  and  pursuant  to 
chapter  269,  Laws  of  1880. 

FINCH,  J.  We  need  not  at  present  deny  that  assessors,  after 
the  completion  of  their  roll  and  during  the  statutory  notice  of  twen- 
ty days  preceding  the  final  hearing  and  review,  may  correct  a  mere 
clerical  error,  apparent  upon  the  face  of  the  roll,  and  which  the 
parties  interested,  by  mere  inspection,  could  see  was  such.  Thus, 
a  mistake  in  the  footing  of  several  separate  items,  obvious  to  any 
one  examining  the  computation,  might,  perhaps,  be  corrected  in  the 
manner  adopted  by  the  defendants  in  the  present  case.  But  we 
must  go  much  further  than  that  in  order  to  sustain  the  appeal  of 
the  assessors.  It  has  been  decided,  and  is  not  now  disputed,  that 
after  the  completion  of  the  roll,  and  the  formal  notice  of  that  com- 
pletion, assessors  are  without  jurisdiction  to  change  either  the  per- 
sons or  property  assessed,  or  the  adjudged  valuation  of  the  latter, 
•except  upon  complaint  of  the  party  aggrieved.  {Clark  v.  Norton, 
49  N.  Y.  248 ;  West/all  v.  Preston,  id.  352 ;  Overing  v.  Foote,  65  id. 
;263.)  The  relator  as  trustee  was  intended  to  be  assessed  upon  per- 
sonal property  in  his  hands  to  the  amount  of  $40,000.  The  asses- 
sors agreed  upon  that  amount  as  the  correct  valuation,  but  they,  or 
some  one  of  them,  entered  it  on  the  roll  at  $4,000.  Before  the 
notice  was  given  of  the  completion  of  the  roll,  and  while  change 
or  correction  was  entirely  within  their  power,  they  discovered  the 
fact  of  the  mistaken  entry.  With  this  actual  knowledge,  they 
failed  to  make  the  change  which  duty  required  and  opportunity 
permitted,  but  negligently  allowed  the  error  to  remain  until  they 
themselves  certified  that  the  roll  was  complete  and  open  for  inspec- 
tion. The  notice  to  that  effect  was  given  on  the  25th  day  of  July, 
1882,  and  no  change  in  the  entry  was  made  until  after  August  2, 
1882.  After  that  and  before  the  review  day  one  of  the  assessors 
changed  the  $4,000  to  $40,000.  So  far  as  appears,  he  did  this  at 
the  time,  without  notice  to  the  relator,  or  even  to  his  associates,  al- 
though the  latter  afterward  approved  and  ratified  his  act.  And 


348  LISTING  OF  PERSONS  AND  VALUATION. 

thus  matters  stood  until  the  review  day  arrived,  and  then  for  the 
first  time  notice  was  given  to  the  relator  of  the  change  which  had 
been  made.  He  demanded  to  have  the  assessment  stricken  out  or 
restored  to  the  original  amount,  $4,000,  which  was  denied.  By  this 
process  he  was  deprived  utterly  of  the  twenty  days  notice  which  the 
statute  allowed  him.  To  sustain  the  assessment  might  operate  in 
this  wise.  Immediately  upon  the  completion  of  the  roll  and  pub- 
lication of  the  fact,  a  tax  payer  examines  it  and  finds  himself  as- 
sessed for  $1,000  of  personal  property  and  is  content.  He,  there- 
fore, does  not  appear  on  the  review  day,  but  finds  later  that  during 
the  running  of  the  notice  the  assessors  had  added  a  cipher  and  in- 
creased his  liability  ten  times.  If  it  be  said  in  such  case  that  he 
should  have  had  notice  of  the  change,  then  what  warrant  is  there 
for  narrowing  that  notice  to  one  day  when  the  statute  awards  twen- 
ty. Even  a  clerical  error,  if  it  affects  substantial  rights  of  a  party, 
is  not  corrected  by  the  courts  without  notice  to  him,  and  that  for 
such  full  and  regular  period  as  the  law  prescribes.  Here  the  relatoi 
had  no  notice  of  the  actual  assessment  charged  against  him  until 
the  review  day  arrived.  The  effect  upon  him  was  the  same  as  if 
the  change  had  been  purposely  made  with  a  view  of  taking  him  by 
surprise  and  giving  him  the  least  possible  notice.  The  ground  now 
taken  is  that  the  change  was  but  the  correction  of  a  clerical  error. 
It  was  much  more  than  that,  for  it  concerned  the  very  substance 
and  extent  of  the  assessment.  What  may  properly  be  considered  a 
mere  clerical  error  under  the  assessment  laws  was  determined  in 
Matter  of  Hermance  et  al.,  (71  N.  Y.  485).  Under  the  act  of  1869 
the  boards  of  supervisors,  on  the  recommendation  of  the  County 
Court,  were  authorized  "to  correct  any  manifest,  clerical,  or  other 
error  in  any  assessments,"  etc.  After  discussing  the  word  "mani- 
fest" the  court  said:  "Clerical  errors  are  mentioned  to  distin- 
•guish  them  from,  and  exclude  errors  of  substance,  of  judgment,  or 
of  law;"  and  these  latter  were  further  described  as  "errors  affect- 
ing the  merits  of  the  assessment"  and  not  mere  errors  of  form. 
The  error  here,  if  clerical  in  its  origin,  was  one  which  affected  the 
substance  of  the  assessment,  and  when  discovered  by  the  assessors 
before  the  completion  of  the  roll,  and  still  suffered  to  remain,  be- 
came an  error  of  pure  negligence.  Shall  they  be  permitted  to  plead 
that  as  a  sufficient  reason  for  depriving  the  tax  payer  of  the  full 
notice  which  the  law  gives  him  and  which  is  his  right?  That  the 
change  may  have  been  a  just  one  on  its  merits  does  not  alter  the 
case.  That  question  is  not  here.  Possibly  and  almost  probably, 
every  other  assessment  upon  the  same  roll  might  have  been  in- 


COMMONWEALTH  V.  FREEDLEY'S  EXECUTORS.      349 

creased  during  the  running  of  the  notice  without  compelling  any 
one  to  pay  a  tax  on  what  he  did  not  have.  That  fact  would  neither 
justify  nor  excuse  the  unauthorized  action.  The  assessors  speak  to 
the  tax  payers  through  their  completed  rolls.  Those,  and  those 
only,  register  their  judgments.  What  the  property-owner  there 
finds  he  has  a  right  to  rely  upon  as  in  truth  the  judgment  and  de- 
termination of  the  officers.  If  they  may  change  it,  with  little  or  no 
notice,  to  correspond  with  some  unregistered  judgment  and  opinion 
known  only  to  themselves,  and  so  as  not  merely  to  correct  a  formal 
or  non-substantial  error  but  so  as  to  increase  valuations  and  add 
to  liabilities  there  will  be  little  of  safety  to  the  tax  payer  or  of  util- 
ity in  the  rights  which  the  statute  confers. 

We  are  of  opinion  that  the  case  was  properly  decided  and  that 
the  judgment  should  be  affirmed. 

All  concur. 

Judgment  affirmed. 


COMMONWEALTH  V.  FREEDLEY'S  EXECUTORS. 

Supreme  Court  of  Pennsylvania.     1853. 
21  Pennsylvania  State  33. 

WOODWARD  J.  The  Acts  of  the  Assembly  of  7th  of  April,  1826, 
and  22nd  April,  1846,  relating  to  collateral  inheritance  taxes,  as- 
sess the  tax  at  a  fixed  rate  on  the  "clear  value"  of  the  estates  de- 
scribed in  the  acts.  But  how  shall  the  clear  value  of  the  estate 
be  ascertained?  The  legislature  undertook  to  answer  this  question 
by  the  12th  section  of  the  Act  of  April  10,  1849,  entitled  an  Act 
to  create  a  Sinking  Fund,  &c. 

As  amended  by  the  10th  section  of  the  Act  of  llth  March,  1850, 
relating  to  collateral  inheritance  taxes,  this  12th  section  requires 
the  Register  to  appoint  an  appraiser  as  often,  and  whenever  occa- 
sion may  require,  for  three  purposes :  1st.  To  put  a  fair  valuation 
on  the  real  estate  subject  to  the  tax.  3d.  To  make  a  fair  and  con- 
scionable  appraisement  of  the  personal  estate.  3d.  To  assess  and 
fix  the  then  cash  value  of  all  annuities  and  life  estates,  growing  out 
of  said  estate.  From  this  appraisement  and  assessment  any  per- 
son, dissatisfied  therewith,  has  a  right  to  appeal  to  the  Register's 
Court,  within  thirty  days,  on  paying  or  giving  security  for  costs 
and  taxes. 

That  the  assessment  of  the  appraiser  is  to  be  final,  if  not  ap- 
pealed from,  is  shown  by  the  act  declaring  that  it  is  made  "to  fix 


350          LISTING  OF  PERSONS  AND  VALUATION. 

the  valuation  of  the  real  estate" — that  the  appraisement  of  the  per- 
sonal estate  is  to  be  fair  and  conscionable,  and  that  the  tax  on  an- 
nuities, and  life  estates,  is  to  be  "immediately  payable  out  of  the 
estate  at  the  rate  of  said  valuation."  But  the  property  subject  to 
the  tax  may  be  fraudulently  concealed,  accidently  overlooked,  or 
may  not  be  known  to  the  representatives  of  the  decedent  at  the 
time  of  the  appraisement,  and,  therefore,  the  Register  is  to  appoint 
an  appraiser  "as  often  as,  and  whenever  occasion  may  require." 
Whenever  portions  of  the  estate  come  to  light  after  the  first  ap- 
praisement, they  are  to  be  appraised  in  the  same  manner,  but  as 
to  such  portions  as  were  the  subject  of  appraisement,  the  "clear 
value"  is  fixed,  and  the  law  assesses  the  tax  of  five  per  cent.  Like 
(the  assessment  of  taxes  for  state  and  county  purposes,  the  property 
subjected  is,  first,  to  be  found,  then  valued  and  appraised,  and  then 
taxed;  but,  instead  of  officers  assessing  a  rate  of  taxes  on  the  ascer- 
tained property,  and  valuation  according  to  the  public  necessities, 
the  law,  in  this  instance,  assesses  a  fixed  rate. 

Such  is  the  system  provided  for  collateral  inheritance  taxation, 
and  it  does  not  admit  of  opening,  to  take  in  additions  to  the  clear 
value  of  property  once  assessed.  That  property  is  vested  in  the 
heir  or  devisee.  If  it  appreciates,  after  it  comes  to  him,  it  is  his 
good  luck, —  if  it  depreciates,  it  is  his  misfortune ;  but,  'as  the  state 
would  not  submit  to  a  reassessment  for  the  purpose  of  diminishing 
her  tax  in  the  event  of  a  subsequent  depreciation,  she  is  not  enti- 
tled to  a  reassessment  for  the  purpose  of  increasing  it  by  reason  of 
an  advance  in  the  market  value  of  the  estate,  after  an  assessment 
by  officers  of  her  own  appointment,  with  the  right  of  appeal.  The 
Commonwealth  is  as  much  subject  to  the  rules  of  equity  and  justice, 
as  her  citizens.  She  possesses  the  taxing  power,  but  when  it  has 
been  fairly  applied,  according  to  her  own  dictation,  it  is  spent  and 
gone.  Having  taken  five  per  cent,  of  the  decedent's  estate,  accord- 
ing to  its  clear  value,  as  fixed  and  conscionably  appraised,  she  can- 
not return  at  intervals  to  take  from  the  new  owners  five  per  cent, 
of  what  their  skill  and  industry,  or  good  luck,  may  have  added  to 
its  value.  If  she  may,  when  are  such  returns  to  cease?  And  at 
what  intervals  are  they  to  occur?  How  long  and  how  often  are 
heirs  and  devisees  to  be  subject  to  such  visitations?  The  law  has 
prescribed  no  rule  for  tortures  of  this  sort,  and,  therefore,  they 
may  not  be  inflicted. 

The  judgment  is  affirmed. 

For  the  power  of  the  legislature  to  provide  for  a  reassessment  see  note  to 
Matter  of  McPherson,  104  N.  Y.  306,  supra. 


BORELAND  V.  BOSTON.  351 

II.    TAX  DOMICIL. 
BORELAND  V.  BOSTON. 

Supreme  Judicial  Court  of  Massachusetts.    January,  1882. 
132  Massachusetts,  89. 

Contract  to  recover  the  amount  of  a  tax  assessed  by  the  defend- 
ant city  upon  the  poll  and  personal  property  of  the  plaintiff,  on 
May  1,  1877,  and  alleged  to  have  been  paid  by  him  under  a  pro- 
test  in  writing.  At  the  trial  in  the  superior  court,  before  Aldrich, 
J.,  the  jury  returned  a  verdict  for  the  plaintiff;  and  the  defendant 
alleged  exceptions,  which  appear  in  the  opinion. 

The  case  was  argued  at  the  bar  in  November,  1880 ;  and  was 
afterwards  submitted  on  briefs  to  all  the  judges. 

LORD,  J. 

The  other  question  raised  is  upon  the  correctness  of  the  instruc- 
tions of  the  presiding  judge  upon  the  question  of  domicil. 

The  evidence  tended  to  show  that  the  plaintiff  was  born  in  Bos- 
ton in  1824,  and  had  lived  there  until  June  1876,  when  he  sailed 
for  Europe  with  his  family.  He  testifies  that  when  he  left  Boston 
he  had  definitely  formed  the  intention  of  not  returning  to  Boston 
as  a  resident;  that  in  the  fall  of  1876  he  had  decided  to  make 
Waterford,  Connecticut,  his  residence,  and  then  formed  the  inten- 
tion of  purchasing  land  there,  which  he  bought  on  May  28,  1877; 
and  that  he  remained  in  Europe  until  1879,  when  he  returned  to 
this  country,  and  went  to  Waterford.  On  this  evidence,  the  judge- 
instructed  the  jury,  "that  a  citizen  by  the  laws  of  this  Common- 
wealth must  have  a  home  or  domicil  somewhere  on  the  first  day 
of  May  for  the  purpose  of  taxation;  that  in  order  to  change  such 
home  or  domicil,  once  acquired,  and  acquire  a  new  one,  the  inten- 
tion to  make  the  change  and  the  fact  must  concur;  that  if  the 
plaintiff  with  no  definite  plan  as  to  the  length  of  time  he  should 
remain  abroad,  and  no  definite  purpose  about  a  change  of  domicil, 
went  to  Europe  with  his  family,  that  would  not  effect  a  change  of 
his  domicil  from  Boston,  and  he  would  remain  liable  to  taxation 
there ;  but  that  if  he  left  .Boston  in  1876  with  his  family  to  reside 
in  Europe  for  an  indefinite  length  of  time,  with  the  fixed  purpose 
never  to  return  to  Boston  again  as  a  place  of  residence,  and  with 
the  fixed  purpose  of  making  some  place  other  than  Boston  his  resi- 
dence whenever  he  should  return  to  the  United  States,  and  had  in 


352          LISTING  OF  PERSONS  AND  VALUATION. 

his  mind  fixed  upon  such  place  of  residence  before  May  1,  1877,  and 
remained  in  Europe  until  after  that  time,  he  was  not  liable  to  this 
tax  as  an  inhabitant  of  Boston  on  the  first  of  May  of  that  year;  that 
whether  he  had  done  enough  to  make  Waterford  his  home  or  not, 
was  not  essential  in  this  case, —  if  he  had  lost  his  home  in  or 
ceased  to  be  an  inhabitant  of  Boston  at  the  time,  he  was  not  tax- 
able there." 

There  are  certain  words  which  have  fixed  and  definite  significa- 
tions. "Domicil"  is  one  such  word;  and  for  the  ordinary  purposes 
of  citizenship,  there  are  rules  of  general,  if  not  universal  accepta- 
tion, applicable  to  it.  "Citizenship,"  "habitancy''  and  "residence" 
are  severally  words  which  may  in  the  particular  case  mean  precisely 
the  same  as  "domicil,"  but  very  frequently  they  may  have  other 
and  inconsistent  meanings;  and  while  in  one  use  of  language  the 
expressions  a  change  of  domicil,  of  citizenship,  of  inhabitancy,  of 
residence,  are  necessarily  identical  or  synonymous,  in  a  different  use 
of  language  they  import  different  ideas.  The  statutes  of  this  Com- 
monwealth render  liable  to  taxation  in  a  particular  municipality 
those  who  are  inhabitants  of  that  municipality  on  the  first  day  of 
May  of  that  year.  Gen.  Sts.  c.  11,  §§  6,  12.  It  becomes  important, 
therefore,  to  determine  who  are  inhabitants,  and  what  constitutes 
inhabitancy. 

We  cannot  construe  the  statute  to  mean  anything  else  than  "be- 
ing domiciled  in."  A  man  need  not  be  a  resident  anywhere.  He 
must  have  a  domicil.  He  cannot  abandon,  surrender  or  lose  his 
domicil,  until  another  is  acquired.  A  cosmopolite,  or  a  wanderer 
up  and  down  the  earth,  has  no  residence,  though  he  must  have  a 
domicil.  It  surely  was  not  the  purpose  of  the  Legislature  to  allow 
a  man  to  abandon  his  home,  go  into  another  State,  and  then  re- 
turn to  this  Commonwealth,  reside  in  different  towns,  board  in  dif- 
ferent houses,  public  or  private,  with  no  intention  of  making  any 
place  a  place  of  residence  or  home,  and  thus  avoid  taxation.  Such 
a  construction  of  the  law  would  create  at  once  a  large  migratory 
population. 

If  it  should  be  deemed  sound  to  hold  that  a  person,  who,  before 
the  first  day  of  May,  with  an  intention  in  good  faith  to  leave  this 
iState  as  a  residence  and  to  adopt  as  his  home  or  domicil  another 
place,  is  in  good  faith  and  with  reasonable  diligence  pursuing  his 
way  to  that  place,  is  not  taxable  here  upon  the  first  of  May,  the 


BORELAND  V.  BOSTON.  353 

doctrine   should   be   limited   strictly   to   cases    falling  within   these 
facts. 

We  think,  however,  that  the  sounder  and  wiser  rule  is  to  make 
taxation  dependent  upon  domicil.  Perhaps  the  most  important 
reason  for  this  rule  is,  that  it  makes  the  standard  certain.  Another 
reason  is,  that  it  is  according  to  the  general  views  and  traditions  of 
our  people. 

We  have  said  that  we  prefer  the  test  of  domicil,  because  of  its 
certainty  and  because  of  its  conformity  to  the  views  and  traditions 
of  our  people,  and,  we  may  add,  more  in  accordance  with  the  various 
adjudications  upon  the  subject  in  this  State,  and  more  in  accord 
with  the  general  legal  and  judicial  current  of  thought.  It  is  true, 
that,  as  said  by  Mr.  Justice  Metcalf,  "it  has  repeatedly  been  said 
by  this  and  other  courts,  that  the  terms  'domicil/  'inhabitancy' 
and  'residence'  have  not  precisely  the  same  meaning."  But  it 
will  be  found  upon  examination  that  these  three  words  are  often 
used  as  substantially  signifying  the  same  thing. 

Upon  the  whole,  therefore,  we  can  have  no  doubt  that  the  word 
"inhabitant"  as  used  in  our  statutes  when  referring  to  liability  to 
taxation,  by  an  overwhelming  preponderance  of  authority,  means, 
"one  domiciled."  While  there  must  be  inherent  difficulties  in  the 
decisiveness  of  proofs  of  domicil,  the  test  itself  is  a  certain  one; 
and  inasmuch  as  every  person  by  universal  accord  must  have  a 
domicil,  either  of  birth  or  acquired,  and  can  have  but  one,  in  the 
present  state  of  society  it  would  seem  that  not  only  would  les? 
wrong  be  done,  but  less  inconvenience  would  be  experienced,  by 
making  domicil  the  test  of  liability  to  taxation,  than  by  the  attempt 
to  fix  some  other  necessarily  more  doubtful  criterion. 

The  plaintiff  does  not  bring  himself  within  this  rule;  for  al- 
though he  might  have  left  the  Commonwealth  with  the  fixed  pur- 
pose to  abandon  it  as  a  residence,  he  did  not  leave  it  on  his  way 
to  a  place  certain  which  he  had  determined  upon  as  his  future  resi- 
dence, and  was  proceeding  to  with  due  despatch;  and,  upon  the 
general  rule  that,  having  had  a  domicil  in  this  Commonwealth,  he 
remains  an  inhabitant  for  the  purpose  of  taxation  until  he  has  ac- 
quired a  new  domicil,  the  intention  and  fact  had  not  concurred  at 
the  time  when  this  tax  was  assessed.  The  instructions  of  the  pre- 
23 


354          LISTING  OF  PERSONS  AND  VALUATION. 

siding  judge,  therefore,  inasmuch  as  they  were  not  based  upon  the 
rules  here  laid  down,  were  not  accurately  fitted  to  the  facts  of  the 
case,  and  the 

Exceptions  must  be  sustained. 


PENNSYLVANIA  V.  RAVENEL, 

Supreme   Court   of  the   United   States.     December,   1858. 
21  Howard  104. 

Mr.  Justice  NELBON  delivered  the  opinion  of  the  court. 

This  is  a  writ  of  error  to  the  Circuit  Court  of  the  United  States 
for  the  eastern  district  of  Pennsylvania. 

The  action  was  brought  by  the  State  of  Pennsylvania  against  the 
defendant,  executor  of  the  late  Mrs.  Kohne,  to  recover  the  sum  of 
$5,820.23,  called  a  collateral-inheritance  tax,  assessed  upon  the  per- 
sonal estate  of  the  testatrix.  By  the  law  of  Pennsylvania,  where 
the  property  of  the  deceased  passes  to  his  or  her  collateral  heirs, 
or  to  strangers,  either  by  the  law  concerning  intestate  estates,  or  by 
will,  it  is  made  subject  to  a  specific  taxation  for  the  benefit  of  the 
State.  This  tax  is  five  per  centum  on  the  clear  value  of  the  estate. 
(Brightly's  Purdon,  p.  138;  act  22d  April,  1846,  sec.  14.)  And 
according  to  the  construction  of  these  acts  imposing  the  tax,  it  is 
held,  if  a  decedent  be  domiciled  in  the  State  at  the  time  of  his  or 
her  death,  stocks  of  other  States,  or  of  corporations  of  other  States, 
and  debts  due  in  other  States,  in  the  hands  of  the  executors  or  ad- 
ministrators, are  liable  to  this  tax.  (4  Harris's  Rep.,  63;  18  How- 
ard's Rep.) 

But  if  the  domicil  of  the  deceased  be  not  in  Pennsylvania,  then 
the  estate  is  not  subject  to  the  tax. 

Mrs.  Kohne  died  in  the  city  of  Philadelphia  in  March,  1852,  and 
the  question  in  the  court  below  was,  whether  or  not  she  was  domi- 
ciled in  Pennsylvania  at  the  time  of  her  death,  or  in  the  State  of 
South  Carolina.  The  jury,  under  the  charge  of  the  court,  found  a 
verdict  for  the  defendant. 

The  case  is  before  us  on  four  exceptions  taken  to  the  charge  of 
the  court. 

The  first  three  it  is  not  material  to  notice 

The  fourth  exception  is,  that  the  court,  in  the  charge,  (For 
charge  see  infra)  took  the  fact  of  domicil  from  the  jury. 


PENNSYLVANIA  V.  RAVENEL.  355 

This  exception,  we  think,  is  founded  in  a  misapprehension  of 
the  instructions  given.  The  court,  after  stating  to  the  jury  that 
the  question  of  elomicil  was  one  of  mixed  law  and  fact,  observed, 
that  it  was  for  the  court  to  instruct  them  what  constituted  a  domi- 
cil, and  for  the  jury  to  apply  the  principles  of  law  governing  it  to 
the  facts  as  found  by  them;  that  the  jury  had  no  right  to  disre- 
gard the  law  as  laid  down  by  the  court,  and  the  court  had  no  right 
to  dictate  to  them  as  respected  the  facts,  which  they  must  find  on 
their  own  responsibility.  The  court  then  stated  to  the  jury  the 
principles  of  law  applicable  to  the  question  of  domicil,  to  which 
no  exception  has  been  taken.  Also,  that  as  it  had  been  admitted 
Mr.  Kohne,  the  husband,  who  died  in  Philadelphia  in  1829,  had 
his  domicil  in  Pennsylvania  at  the  time  of  his  death,  the  domicil 
of  the  wife  must  be  taken  as  in  that  State  at  the  time,  and  submit- 
ted the  question  whether  or  not  she  had  since  changed  it  to  the 
State  of  South  Carolina;  and  then,  after  referring  to  the  leading 
facts  given  in  evidence,  and  relied  on  to  establish  a  change  of  dom- 
icil, observed,  that  if  the  jury  believed  this  evidence,  the  domicil 
of  Mrs.  Kohne  was  in  South  Carolina. 

The  court  further  say,  that  the  mere  speaking  of  a  place  as  a 
home,  without  any  act  showing  an  intention  to  return  to  it,  would 
amount  to  nothing.  But  if  acts  and  the  language  concur,  as  proved 
by  the  witnesses  in  the  case,  it  would  be  a  denial  to  the  deceased  of 
the  right  to  choose  her  own  domicil,  not  to  allow  her  acts  and  decla- 
rations, continued  for  many  years,  to  be  conclusive  of  the  fact. 

We  perceive  nothing  in  the  instructions  of  the  court,  or  in  the 
view  of  the  case  as  presented  to  the  jury,  by  which  the  question  of 
domicil,  so  far  as  it  depended  upon  the  facts,  was  taken  from  the 
jury.  The  evidence  was  very  strong  in  support  of  a  change  of  domi- 
cil by  Mrs.  Kohne  after  the  death  of  her  husband,  and,  if  believed 
by  the  jury,  it  was  not  too  much  to  say,  as  matter  of  law,  that  they 
should  find  for  the  defendant. 

The  judgment  of  the  court  below  is  affirmed. 
Mr.  Justice  DANIEL,  dissenting   (stating  charge  to  jury  below)  : 
"If  the  jury  find,  that  after  his  death   [the  death  of  the  hus- 
band] she  [Mrs.  Kohne]  returned  to  her  former  domicil  in  Charles- 
ton, took  possession  of  the  house  and  servants  devised  to  her,  lived 
in   that  house  six   or  seven  months   of  every  year,  calling  it  her 
home,  spending  only  a  few  weeks  in  the  spring  and  fall  in  her 
house  here,  and    the    remainder  of  the  summer  at  watering-places; 
coming  north  in  the  summer  for  the  sake  of  her  health,  always  in- 
tending to  return  to  her  house  in   Charleston;  that  she  was  hin- 


356          LISTING  OF  PERSONS  AND  VALUATION. 

dered  returning  the  last  time  from  sickness;  if  she  consulted  coun- 
sel how  she  might  avoid  giving  any  pretence  to  the  tax-gatherers 
of  Pennsylvania  to  treat  her  as  domiciled  here;  if  she  carefully  de- 
nied at  all  times  her  citizenship  in  Philadelphia,  even  to  erasing  it 
from  printed  lists  of  her  church  donations,  as  the  assertion  of  a 
falsehood;  if  she  refused  to  have  some  of  her  furniture  removed 
here,  for  fear  such  a  fact  would  be  siezed  upon,  after  her  death, 
for  the  purpose  of  asserting  her  domicil  here;  if  she  called  herself, 
in  her  will,  'of  Charleston;'  if,  when  absent  from  that  place,  she 
always  spoke  of  returning  to  it  as  her  home,  and  did  return  to  it 
as  such,  till  hindered  by  sickness — if  the  jury  believed  this  evidence 
of  defendant's  witnesses,  testimony  which  has  not  been  contradicted 
or  denied,  it  would  be  absurd  to  say  her  domicil  was  not  where  she 
asserted  it  to  be,  to  wit,  in  the  city  of  Charleston." 


BELL  V.  PIERCE. 

Commission  of  Appeals  of  New   York.     May, 
51  New  York,  12. 

About  the  20th  of  June,  1864,  plaintiff's  family  went  to  the  house 
in  West  Seneca,  and  remained  there,  as  in  previous  years,  for  about 
three  months,  and  then  returned  to  the  house  in  Buffalo;  and  dur- 
ing the  summer  season,  plaintiff  was  with  his  family  in  West  Sen- 
eca, or  at  his  house  in  Buffalo,  substantially  as  is  stated  to  have 
been  his  habit  in  previous  years.  Defendants  had  no  knowledge, 
before  the  delivery  of  the  assessment  roll  to  the  supervisors  of  the 
town,  that  the  plaintiff  had  or  claimed  to  have  any  residence  except 
in  West  Seneca,  although  they  knew  that  he  had  been  residing  dur- 
ing that  year  in  Buffalo,  and  that  his  family  had  come  to  West 
Seneca  only  a  few  weeks  previous  to  July  1,  1864.  They  gave  the 
statutory  notices  of  the  completion  of  the  assessment  roll,  and  of 
their  meetings  to  correct  the  same,  and  no  one  appeared  before  them 
to  object  to  the  regularity  of  the  plaintiff's  assessment.  Plaintiff 
was  not  assessed  for  personal  property  in  the  city  of  Buffalo  in  the 
year  1864.  Upon  trial  at  Circuit,  the  court  directed  a  verdict  for 
the  plaintiff,  subject  to  the  opinion  of  the  court  at  General  Term. 
A  verdict  was  rendered  accordingly. 

The  omclusions  of  law* at  General  Term  were  as  follows: 
That  the  defendants,   as  assessors  as  aforesaid,  had  jurisdiction 
to  determine  whether  the  plaintiff  was  taxable  in  said  town  of  West 


BELL  V.  PIERCE.  357 

Seneca,  for  personal  property,  at  the  time  they  prepared  said  as- 
sessment roll,  in  1864,  and  that  their  determination  on  that  sub- 
ject is  conclusive. 

That  both  of  said  taxes  were  legally  assessed  against  the  plaintiff. 

That  the  plaintiff  cannot  maintain  this  action,  but  the  defend- 
ants should  have  judgment  on  the  verdict. 

And  judgment  was  directed  and  entered  accordingly. 

HUNT,  C.  If  the  General  Term  was  right  in  holding  that  the 
defendants,  as  assessors,  had  jurisdiction  to  determine  whether  the 
plaintiff  was  an  inhabitant  of  West  Seneca,  taxable  for  personal 
property  in  that  town,  its  judgment  was  correct.  If  in  error  on 
that  point,  its  judgment  was  wrong.  In  Barky te  v.  Shepard,  this 
court  held  that  the  assessors  had  jurisdiction  to  determine  whether 
the  plaintiff's  property  was  entitled. to  exemption  for  the  reason  that 
he  was  a  clergyman.  (35  X.  Y.  238.)  In  Chegary  v.  Jenkins,  this 
court  held  that  the  assessors  had  jurisdiction  to  determine  whether 
the  property  sought  to  be  exempt  as  a  seminary  of  learning  was 
entitled  to  that  exemption.  (5  N.  Y.  376.) 

In  each  of  these  cases  the  assessors  had  jurisdiction  of  the  per- 
son alleged  to  be  taxable,  and  of  the  property  on  which  the  assess- 
ment was  sought  to  be  imposed.  Barhyte,  for  example,  was  a  resi- 
dent of  the  town  of  Spencer.  In  that  town  were  located  both  the 
real  and  personal  estate,  respecting  which  the  question  arose.  He 
was  undoubtedly  a  taxable  inhabitant,  that  is,  one  of  a  class  liable 
to  taxation  under  proper  circumstances.  So  was  Madame  Chegary 
a  taxable  inhabitant  of  New  York.  The  persons  being  taxable  in- 
habitants, and  the  property  in  each  case  being  before  the  assessors, 
it  was  their  duty  to  decide  whether  it  came  within  the  exemptions 
provided  by  law.  The  parties  making  complaint  themselves  sub- 
mitted that  very  question  to  the  assessors.  It  was  their  duty  to  de- 
cide it  as  they  understood  the  law  to  be.  In  Mygatt  v.  Washburn. 
(15  N.  Y.  316),  on  the  other  hand,  the  assessors  had  no  jurisdiction 
of  the  person  of  the  plaintiff.  He  was  not  a  taxable  inhabitant,  that 
is,  he  was  not  liable  to  taxation  for  personal  property  in  the  town 
of  Oxford,  under  any  circumstances.  The  assessors,  therefore,  had 
no  power  to  adjudicate  upon  the  question  of  his  taxability,  and 
when  they  undertook  to  do  so  their  action,  was  void,  and  did  not 
protect  them  from  liability. 

Under  the  Revised  Statutes  the  rule  is  as  follows,  viz:  "Every 
person  shall  be  assessed  in  the  town  or  ward  where  he  resides,  when 
the  assessment  is  made,  for  all  the  personal  estate  owned  by  him." 
(1  R.  S.  390,  §  5.)  But  one  assessment  can  be  made  upon  an  in- 


358          LISTING  OF  PEESONS  AND  VALUATION. 

dividual  for  personal  estate,  and  that  must  be  in  the  town  or  ward 
where  he  resides  when  the  assessment  is  made.  In  the  year  1850 
(Laws  1850,  chap.  92,  p.  142),  it  was  enacted,  "that  in  case  any 
person  possessed  of  such  personal  estate  shall  reside  during  any 
year  in  which  taxes  may  be  levied,  in  two  or  more  counties,  town? 
or  wards,  his  residence,  for  the  purposes  and  within  the  meaning  of 
this  section  (§5,  supra),  shall  be  deemed  and  held  to  be  in  the 
town,  county  or  ward  in  which  his  principal  business  shall  have 
been  transacted."  (1  R.  S,.  Edm.  ed.,  362.) 

A  new  test  to  determine  the  fact  of  residence,  which  was  before 
unknown,  was  created  by  this  law.  By  the  fact  as  ascertained  in 
this  mode,  to  wit,  the  place  of  business,  was  the  liability  to  taxa- 
tion determined.  The  statute  assumes  that  a  man  may  have  more 
than  one  place  of  residence  at  the  same  time.  The  liability  to  tax- 
ation for  personal  property  is  fixed  by  the  residence  on  the  first 
day  of  July  in  each  year.  Mygatt  v.  Washburn,  supra.  No  per- 
son can  be  assessed  as  a  taxable  inhabitant  of  Seneca  unless  on  that 
day  he  was  a  resident  of  that  town.  On  that  day  the  plaintiff  had, 
with  his  family,  occupied  his  own  house  in  that  town  for  ten  days. 
His  family  remained  there  for  three  months  continuously,  the  plain- 
tiff taking  a  portion  of  his  meals  there  every  day  and  spending 
there  five  or  six  nights  of  each  week.  He  attended  daily  to  his 
business  in  Buffalo,  taking  a  portion  of  his  meals  at  his  house 
there,  sleeping  there  one  or  two  nights  of  each  week,  his  wife  occa- 
sionally taking  meals  at  the  house  with  him.  The  plaintiff,  upon 
this  state  of  facts,  was  no  doubt  a  voter  in  Buffalo,  and  was  there 
liable  to  military  and  jury  duty.  He  was  a  resident  of  Buffalo,  hav- 
ing his  domicile  in  that  city.  The  cases  also  show  that  he  was  at 
the  same  time  a  resident  of  West  Seneca.  To  establish  a  residence, 
requires  a  less  permanent  abode  than  to  give  a  domicile,  or  even  to 
create  an  inhabitance.  (Harvard  v.  Gore,  5  Pick.  379;  Guire  v. 
0' Daniel,  1  Binny  349;  Haggart  v.  Morgan,  1  Seld.  422.) 

The  books  are  full  of  cases  defining  residence  and  non-residence 
under  the  statutes,  subjecting  non-residents  to  arrest  and  their  prop- 
erty to  attachment.  It  would  be  difficult  to  reconcile  these  cases.  I 
do  not  find  any  well  considered  cases  where  the  question  has  arisen 
upon  the  statute  providing  for  the  taxation  of  personal  property, 
other  than  those  I  have  referred  to.  I  conclude,  therefore,  that  the 
plaintiff,  on  the  first  da$  of  July,  1864,  was,  for  the  purpose  of 
taxation,  a  resident  of  the  town  of  West  Seneca.  Being  a  resident 
of  that  town,  and  having  personal  property  liable  to  taxation,  the 


MIDDLETOWN  FERRY  CO.  V.  MIDDLETOWN.          359 

assessors  had  jurisdiction  to  include  that  property  in  the  assessment 
roll  of  that  town.  The  case  comes  within  the  principle  of  Barhytc 
v.  Shepard,  supra,  and  not  within  that  of  Mygatt  v.  Washburn, 
where  the  assessors  had  no  jurisdiction  of  the  person  of  the  plain- 
tiff, and  no  right  to  take  any  action  on  the  subject  Where  the 
principal  business  of  the  plaintiff  was  transacted  was  a  matter  of 
fact,  to  be  ascertained  by  proof  and  to  be  settled  by  judicial  deter- 
mination. This  determination  was  to  be  made  by  the  assessors.  It 
was  made  upon  proof  presented,  or,  if  none  was  presented,  by  the 
best  means  of  knowledge  possessed  by  them.  They  are  not  liable 
for  an  erroneous  decision  of  a  question  which  they  had  jurisdiction  to 
decide. 

The  judgment  should  be  affirmed  with  costs. 


EARL  and  GRAY,  C.  C.,  dissenting. 


III.    LIABILITY  OF  CORPORATIONS. 
MIDDLETOWN  FERRY  CO.  V.  TOWN  OF  MIDDLETOWN. 

Supreme  Court  of  Errors  of  Connecticut,  April,  187 S. 
40  Connecticut.  65. 

PARK,  J.  The  statute  in  relation  to  the  assessment  and  collec- 
tion of  taxes,  (Gen.  Statutes,  page  710,)  provides  that  the  per- 
sonal property  of  certain  corporations  shall  be  assessed  and  set  in 
the  list  of  the  towns  in  which  such  corporations  have  their  princi- 
pal place  of  business  or  exercise  their  corporate  powers.  The  plain- 
tiffs' corporation  comes  within  this  provision  of  the  statute,  and  the 
plaintiffs  claim,  and  the  court  has  found,  that  during  the  time  cov- 
ered by  the  plaintiffs'  declaration  they  had  their  principal  place  of 
business  and  exercised  their  corporate  powers  in  the  town  of  Port- 
land. 

This  finding  of  the  court  would  seem  to  decide  the  case  in  favor 
of  the  plaintiffs,  unless  it  can  be  said,  as  a  matter  of  law,  that  the 
principal  place  of  business  of  a  corporation,  or  where  it  exercises 
its  corporate  powers,  is  where  the  business  of  the  corporation  is  be- 
ing carried  on  by  its  servants  and  agents,  who  perform  such  duties 
as  the  corporation  requires  of  them. 

It  appear?  in  the  case  that  the  town  of  Middletown  extends  to 


360  LISTING  OF  PERSONS  AND  VALUATION. 

the  east  side  of  the  Connecticut  River,  and  that  consequently  the 
ferry  boats  of  the  plaintiffs,  in  plying  back  and  forth  from  the  east 
to  the  west  shore  of  the  river  in  the  performance  of  the  business 
of  the  plaintiffs,  are  all  the  time  within  the  limits  of  the  defendant 
town;  and  hence  the  defendants  claim  that,  during  the  time  in  ques- 
tion, the  principal  place  of  the  business  of  the  plaintiffs,  or  where 
they  exercise  their  corporate  powers  was  upon  their  ferry  boats  on 
the  river,  although  the  court  had  found  that,  previous  to  the  time 
in  question,  the  stockholders  of  the  plaintiffs'  corporation,  in  legal 
meeting,  duly  warned  and  held,  voted,  in  good  faith,  to  change  its 
place  of  business  from  the  town  of  Middletown  to  the  town  of 
Portland,  where  four-fifths  of  the  stock  of  the  corporation  was 
owned  and  held,  and  where  a  majority  of  the  directors  resided;  and 
although  all  the  regular  and  special  meetings  of  the  corporation 
and  of  the  directors  have  ever  since  been  there  held,  and  all  the 
books  and  papers  of  the  corporation,  except  such  as  have  been  in 
daily  use  in  carrying  on  the  business  of  the  corporation,  have  been 
there  deposited. 

We  think  it  is  clear  that  the  principal  place  of  the  business  of  a 
corporation,  or  where  it  exercises  its  corporate  powers,  within  the 
meaning  of  the  statute,  is  where  the  governing  power  of  the  cor- 
poration is  exercised;  where  those  meet  in  council  who  have  a  right 
to  control  its  affairs  and  prescribe  what  policy  of  the  corporation 
shall  be  pursued,  and  not  where  the  labor  is  performed  in  executing 
the  requirements  of  the  corporation  in  transacting  its  business.  It 
may  be  true  in  the  sense  of  "qui  facit  per  alium  facit  per  se,"  that 
a  corporation  may  be  said  to  exercise  its  corporate  powers  wherever 
its  business  is  being  transacted,  but  in  this  statute  the  expression  is 
used  in  a  stricter  sense.  It  has  reference  to  what  is  done  directly 
by  the  corporation  itself  in  the  management  of  its  affairs,  and  not 
to  what  is  done  by  others  in  obedience  to  its  requirements.  We 
think  this  claim  of  the  defendants  is  untenable. 

Again,  it  is  claimed  that  the  plaintiffs  had  no  right  under  their 
charter  to  change  their  principal  place  of  business,  or  the  place 
where  they  had  exercised  their  corporate  powers;  that  this  place 
having  once  been  established  by  the  charter  in  the  town  of  Mid- 
dletown, it  must  there  remain,  and  that  it  did  consequently  remain 
there  during  the  years  in  which  the  assessments  of  the  plaintiffs 
were  made.  But  we  discover  nothing  in  the  charter  which  sustains 
this  claim.  Nothing  in  it  has  been  pointed  out,  except  some  ex- 
pressions from  which  a  slight  inference  might  be  drawn  that  it  was 


WESTERN  TRANSPORTATION  CO.  V.  SCHEU.        361 

expected  that  the  corporation  would  remain  a  Middletown  corpora- 
tion, but  this  is  not  sufficient  to  make  void  the  acts  of  the  corpora- 
tion in  removing  its  principal  place  of  business  from  the  town  of 
Middletown  to  the  town  of  Portland,  when  the  statute  seems  to 
contemplate  that  such  corporations  will  change  their  principal  place 
of  business,  or  the  place  where  they  exercise  their  corporate  powers, 
as  occasion  may  require.  If  it  were  not  so  it  would  have  declared 
that  such  corporations  should  be  taxed  in  the  towns  where  they  first 
had  their  corporate  existence 

There  is  no  error  in  the  judgment  complained  of. 

In  this  opinion  the  other  judges  concurred. 

Foreign  corporations  acquire  the  domicil  of  their  manager.  Dubuque 
v.  Illinois  Central  R.  R.  Co.  39  Iowa  83.  Thus,  if  a  foreign  insurance 
company  deposits  bonds  with  a  state  officer  at  the  state  capital,  it  is  to  be 
taxed  on  these  bonds,  not  at  the  state  capital  but  at  the  domicil  of  its 
managing  agent.  Life  Ins.  Co.  v.  Commissioners,  31  N.  Y.  32.  But 
choses  in  action  owned  by  a  foreign  corporation  may  be  taxed,  if  the 
statute  so  provides  where  they  are  situated.  Savings  etc.,  Society  v. 
Multnomah  Co.,  169  U.  S.  421  supra. 


WESTERN  TRANSPORTATION  CO.  V.  SCHEU  ET  AL. 

Court  of  Appeals  of  New  York.    June,  1859. 
19  New  York,  408. 

Appeal  from  the  Supreme  Court.  The  action  was  for  the  pur- 
pose of  determining  where  the  plaintiff,  a  corporation  having  a  cap- 
ital stock  of  $900,000,  was  taxable.  It  had  been  assessed  for  such 
capital  in  the  town  of  Wheatfield,  Niagara  county,  and  the  com- 
plaint admitted  its  liability  to  such  assessment.  It  had  also  been 
assessed  in  the  eighth  ward  of  the  city  of  Buffalo,  and  the  defend- 
ants, Scheu  and  Reynolds  (the  respondents)  were  officers  of  that 
city,  the  former  of  whom  had  issued,  and  the  latter  was  proceeding 
to  enforce,  a  warrant  for  the  collection  of  the  tax.  The  trial  was 
before  Mr.  Justice  Davis,  without  jury,  and  he  ordered  judgment, 
restraining  Scheu  and  Reynolds  from  collecting  the  Buffalo  assess- 
ment. Upon  appeal,  this  judgment  was  affirmed  at  general  term  in 
the  eighth  district,  and  the  defendants  appealed  to  this  court. 

SELDEN,  J.  It  was  stated  upon  the  argument  that  the  sole  object 
'of  this  suit  was,  to  have  it  judicially  determined  whether  the  plain- 
tiffs are  liable  to  taxation  in  the  city  of  Buffalo;  and  any  technical 
imperfections  in  the  pleadings  or  proceedings  were  expressly  waived, 


3G^          LISTING  OF  PEKSONS  AND  VALUATION. 

with  a  view  to  the  decision  of  this  single  question.  The  general  law 
of  the  State  on  the  subject  of  the  assessment  and  collection  of  taxes 
(1  R.  S.,  389,  §  6),  provides,  that  "all  the  personal  estate  of  every 
incorporated  company,  liable  to  taxation  on  its  capital,  shall  be  as- 
sessed in  the  town  or  ward  where  the  principal  office  or  place  for 
transacting  the  financial  concerns  of  the  company  shall  be." 

The  plaintiff  is  a  corporation  organized  under  the  act  of  April 
15,  1854,  for  the  incorporation  of  companies  to  navigate  the  lakes, 
&c.  (Sess.  Laws,  1854,  218),  the  first  section  of  which  provides, 
that  any  five  or  more  persons  may  form  a  company,  by  making  a 
certificate  in  writing,  and  filing  the  same  "in  the  office  of  the  clerk 
of  the  county  in  which  the  principal  office  for  the  management  of 
the  business  of  the  company  shall  be  situated,"  in  which  certificate 
they  are  required  to  state,  among  other  things,  "the  name  of  the 
city  or  town  and  county  in  which  the  principal  office  for  managing 
•the  affairs  of  such  company  is  to  be  situated." 

The  certificate  filed  by  the  plaintiff,  pursuant  to  this  act,  bearing 
date  of  December  28,  1855,  in  addition  to  other  statements  required 
by  the  statute,  contains  the  following,  viz:  "The  principal  office 
for  managing  the  financial  and  other  affairs  of  such  company  shall 
be  located  and  situated  at  the  village  of  Tonawanda,  in  the  town 
'of  Wheatfield,  county  of  Niagara,  which  is  hereby  declared  to  be  the 
village,  town  and  county  where  the  principal  office  for  managing 
the  affairs  of  such  company  shall  be  situated."  This  certificate  was 
filed  on  or  about  the  day  of  its  date  in  the  office  of  the  clerk  of  the 
county  of  Niagara. 

It  was  proved  upon  the  trial  that  the  company,  shortly  after  its 
organization,  established  and  had  ever  since  maintained  an  office  at 
the  village  of  Tonawanda,  where  the  stock  book  of  the  company  was 
kept,  and  where  the  directors  held  their  regular  monthly  meetings; 
but  at  which  very  little  other  business  was  transacted.  Only  one 
clerk  was  employed  at  this  office,  at  a  salary  of  $150  per  annum. 
It  also  appeared  that  the  business  of  the  company,  consisting  of 
the  transportation  of  produce  and  other  property  upon  the  Western 
Lakes  and  the  Erie  Canal,  was  very  large;  that  twenty  clerks  were 
employed  at  the  office  of  the  company  in  Buffalo;  that  the  presi- 
dent, secretary  and  treasurer  of  the  company  resided  there,  and  did" 
their  business  chiefly  at  that  office;  that  the  business  done  there 
annually  amounted  to  several  hundred  thousand  dollars;  that  full 
books  of  account  of  the  business  of  the  company  were  kept  there; 
that  money  received  at  places  west  of  Buffalo,  after  paying  neces- 
sary disbursements,  were  remitted  to  the  office  at  Buffalo;  that  the 


WESTEKN  TRANSPORTATION  CO.  V.  SCIIEU.        3GO 

company  had  a  large  number  of  offices  both  East  and  West,  at  all 
of  which,  except  New  York  and  Chicago,  the  business  was  much  less 
than  at  Buffalo;  that  more  money  was  received  at  Chicago,  and 
about  twice  as  much  at  New  York,  as  at  Buffalo.  It  was  shown 
also  that  the  object  of  the  company,  in  locating  its  principal  office 
at  Tonawanda,  was  to  avoid  taxation  in  the  city  of  Buffalo. 

Under  these  circumstances  it  is  evident,  that  unless  the  certificate 
filed  pursuant  to  the  statute,  is  conclusive  upon  the  question  of  loca- 
tion— if  the  matter  is  open  to  parol  proof  at  all,  it  is  established  be- 
yond controversy,  that  the  principal  office  "for  transacting  the  finan- 
cial concerns  of  the  company"  is  not  at  Tonawanda,  but  either  at 
New  York  or  Buffalo;  probably  the  latter.  The  only  question  then 
is,  in  regard  to  the  effect  as  evidence,  of  the  statement  in  the  cer- 
tificate. There  are  some  considerations  which  seem  to  me  decisive  of 
this  question.  Unless  the  Legislature  intended  that  the  certificate 
should  be  conclusive,  as  to  the  location  of  the  principal  office,  it  is 
difficult  to  see  any  adequate  motive  for  requiring  the  statement  to 
be  made.  It  is  in  no  manner  essential  to  the  existence  of  a  cor- 
poration that  the  place  of  its  principal  office  should  be  fixed,  or  even 
that  it  should  have  any  such  office.  We  can,  however,  see  obvious 
reasons  why  it  is  expedient  that  corporations  should  be  deemed  to 
have  a  location  for  certain  purposes,  among  which  is  that  of  taxa- 
tion; and  that  this  should  be  definite  and  certain,  and  not  subject 
to  fluctuation  or  doubt.  When  the  question  is  left  open  to  parol 
proof,  serious  difficulties  and  embarrassments  must  often  arise. 
What  makes  the  office  of  a  corporation  its  principal  office?  Is  it 
the  residence  of  its  officers?  or  does  it  depend  upon  the  amount  of 
the  business  done,  or  the  number  of  clerks  kept  at  a  particular 
office?  These  and  other  like  questions  are  of  difficult  solution  where 
the  question  is  left  open  and  at  large,  and  necessarily  tend  to  pro- 
duce controversies  and  litigation.  To  avoid  disputes  upon  the  sub- 
ject was,  I  apprehend,  one  motive  for  requiring  the  location  to  be 
fixed  by  the  certificate.  It  is  not  important  that  a  corporation  should 
be  taxed  where  it  does  the  greatest  amount  of  its  business;  but  it  i« 
important  that  the  place  where  it  is  liable  to  be  taxed  should  be 
known. 

Another  motive  for  the  requirement  in  question,  is  shown  by  sec- 
tion 23  of  the  act  of  1854,  which  requires  the  company  to  keep  its 
stock  books  at  the  place  designated  in  the  certificate.  This  is  for 
the  convenience  of  the  stockholders,  and  of  persons  dealing  in  the 
shares  of  the  corporation.  It  is  of  very  little  consequence  where 
•such  books  are  kept,  whether  where  the  other  business  of  the  com- 


364  LISTING^  OF  PERSONS  AND  VALUATION. 

pany  is  principally  done  or  not;  it  is  only  important  that  the  place 
should  be  known  and  fixed. 

Other  considerations  having  the  same  tendency  might  be  drawn 
from  the  various  provisions  of  the  act  of  1854,  and  from  cotem- 
poraneous  legislation;  but  these  are  sufficient,  I  think,  to  show  that 
the  object  of  the  Legislature,  in  requiring  these  corporations  to 
designate  the  location  of  their  principal  office  in  the  certificate  filed, 
must  have  been  to  produce  that  certainty  on  the  subject,  which 
could  not  otherwise  be  attained,  and  that  the  provision  did  not  orig- 
inate in  any  supposed  necessity  for  having  the  "principal  office"  and 
the  place  of  the  principal  business  of  the  corporation  identical. 

The  defendant's  counsel  seemed,  upon  the  argument,  to  place 
much  reliance  upon  the  fact,  that  the  motive  of  the  company  in 
•placing  its  principal  office  at  Tonawanda  was  to  avoid  taxation. 
But  it  is  no  more  inequitable  or  immoral  for  a  corporation  to  do 
this,  than  for  an  individual  to  do  substantially  the  same.  A  per- 
son may  keep  his  office  in  Buffalo  and  transact  business  there  to 
an  unlimited  amount,  enjoying  all  the  facilities  and  advantages 
which  the  enterprise  and  expenditures  of  the  city  have  afforded, 
and  yet  by  residing  without  the  city  bounds  avoid  all  municipal 
taxation.  When  this  shall  be  practised,  either  by  individuals  or 
corporations,  to  an  extent  which  renders  it  a  serious  evil,  it  will  be 
for  the  Legislature  to  interfere. 

The  judgment  of  the  Supreme  Court  should  be  affirmed. 

All  the  judges  concurring, 

Judgment  affirmed. 

If  the  domicil  of  a  corporation  is  fixed  by  its  charter  it  may  not  be  changed 
subsequently  by  the  corporation  by  moving  its  business  or  property  or  con- 
ducting its  business  elsewhere.  Oswego  Starch  Factory  v.  Dolloway  21  N.  Y. 
449. 


PEOPLE  EX  REL  PLATT  V.  WEMPLE,  COMPTROLLER. 

Court  of  Appeals  of  New  York.     November,  1889. 
117  New  York,  136. 

DANFORTH,.J.  This  case  arises  upon  an  application  made  by  the 
relator,  as  president  of  the  United  States  Express  Company,  for  a 
certiorari  requiring  the  comptroller  of  the  state  to  return  to  the 
Supreme  Court  his  proceedings  relating  to  the  imposition  of  a  tax 
on  the  franchise  or  business  of  that  company,  to  the  end  that  such 


PLATT  V.  WEMPLE.  365 

proceedings  might  be  set  aside,  and  in  the  meantime  the  collection 
of  the  tax  be  stayed. 

The  express  company  was  composed  of  individuals  who  signed  an 
agreement  purporting  to  have  been  made  April  22,  1854,  but  which, 
by  its  terms,  was  to  take  effect  on  the  1st  day  of  May,  1854,  and 
continue  in  force  for  ten  years  thereafter.  On  November  24,  1859, 
the  articles  were  amended  by  the  associates  so  as  to  continue  in 
force  for  twenty  years  from  the  1st  of  May,  1864,  and  on  January 
23,  1884,  the  directors,  under  power  conferred  upon  them  by  the 
associates,  passed  a  resolution  continuing  the  existence  of  the  com- 
pany for  twenty  years  from  May  1,  1884.  The  association  was 
formed  for  the  purpose  of  carrying  on  a  forwarding  agency,  bank- 
ing, exchange  and  insurance  business  between  such  cities  and  towns 
of  the  United  States,  and  those  of  other  countries,  as  the  directors, 
or  their  successors,  might  specify. 

It  is  described  in  the  articles  as  a  "joint-stock  company,"  its  cap- 
ital declared  to  be  $500,000,  divided  into  shares  of  $100  each,  sub- 
ject to  increase  or  decrease,  as  the  board  of  directors  might  think 
proper,  but  represented  by  certificates  or  scrip,  signed  by  the  presi- 
dent and  secretary  of  the  company,  and  countersigned  by  the  treas- 
urer. These  shares  are  made  assignable,  without  restriction,  from 
one  person  to  another,  in  the  usual  form,  in  person  or  by  attorney, 
and  may  be  forfeited  by  order  of  the  directors  for  causes  set  forth 
in  the  agreement.  The  property  and  business  of  the  company  is  to 
be  managed  by  a  board  of  directors,  who,  from  their  own  number, 
might  elect  a  president,  vice-president  and  secretary,  and,  except  by 
their  permission,  "no  shareholder  in"  the  company  can  use  or  sign 
its  associate  name;  in  short,  into  their  hands  the  management  of 
the  whole  business  of  the  company  is  intrusted.  The  directors  are 
also  empowered  to  declare  dividends  from  the  net  earnings  of  the 
company  as  they  may  from  time  to  time  deem  expedient.  Deeds 
and  other  instruments  of  conveyance,  or  as  security,  are  to  run  to 
the  president;  and  all  suits  at  law  or  in  equity  in  favor  of  the  com- 
pany are  to  be  brought  in  his  name.  It  is  also  provided  that  the 
death  of  no  member  or  of  any  number  of  members  less  than  a 
majority  of  the  interest  of  the  whole,  shall  operate  as  a  dissolution 
of  the  company,  but  its  business  shall  continue  as  if  no  death  had 
occurred. 

It  seems  obvious  from  these  articles,  that  the  arrangement  con- 
cur-mated  by  them  has  little  in  common  with  a  private  partnership, 
for  they  provide  for  a  permanent  investment  of  capital,  the  right 


366  LISTING  OF  PERSONS  AND  VALUATION. 

of  succession,  the  transfer  of  property  by  any  assignment  of  the 
certificate  of  ownership,  and  the  prosecution  of  suits  in  the  name 
of  one  person.  The  company 'has,  therefore,  the  characteristics  of 
a  corporation,  and,  so  far  as  it  can,  it  assumes  to  itself  an  inde- 
pendent personality,  and  asserts  powers  and  claims  privileges  not 
possessed  by  individuals  or  partnerships. 

In  view  of  the  capacities  and  attributes  with  which,  as  we  have 
seen,  the  United  States  Express  Company  is  endowed,  and  in  view, 
also,  of  the  statutes  which  legalize  its  assumed  capacities  and  make 
valid  and  effective  its  asserted  right  of  succession,  its  distinctive 
•name  and  the  alienability  of  its  shares,  we  find  nothing  to  warrant 
the  contention  of  the  appellant  that  it  is  a  mere  partnership,  exist- 
ing only  under  its  articles  of  agreement  and  association  It  is  true 
those  articles  contain  no  reference  to  any  statute  of  the  State,  as 
one  under  or  by  which  the  compar,  was  organized,  yet,  by  the  very 
constitution  of  the  body  itself  and  the  privileges  and  powers  which 
it  can  only  exercise  by  virtue  of  those  statutes,  it  must  be  taken  to 
belong  to  one  of  those  classes  of  artificial  beings  described  in  the  act 
of  1880  as  a  "corporation,  joint-stock  company  or  association/'  The 
several  persons  composing  it  are  made  into  a  collective  body  and 
are  given  capacity  in  its  name,  and  not  their  own,  to  take,  grant, 
sue  and  be  sued.  Thus  they  are  united,  or  organized,  or  incorpo- 
rated. The  death  of  a  member  causes  no  interruption,  and  the  power 
of  continued  existence  of  this  one  body,  and  its  organized  or  cor- 
porate action  is  derived  from  no  inherent  power  of  one  or  all  of  ita 
members,  but  from  the  law,  which  sanctions  the  union.  It  is  doing 
business  within  this  state,  and  because  it  was  also  formed  under  the 
laws  of  the  state  it  is  within  the  act.  Nor  does  it  seem  to  us  that 
this  construction  is  at  all  at  variance  with  the  literal  and  precise 
language  of  the  act.  It  declares  (§  3  of  the  act  of  1880,  as  amend- 
ed in  1881,  chap.  36),  "Every  corporation,  joint-stock  company  or 
association  whatever,  now  or  hereafter  incorporated  or  organized 
under  any  law  of  this  state,  or  now  or  hereafter  incorporated  or 
organized  by  or  under  the  laws  of  any  other  state  or  country,  and 
doing  business  in  this  state  (with  certain  exceptions  not  now  mate- 
rial) shall  be  subject  to,  and  pay  a  tax,  as  a  tax,  upon  its  corpo- 
rate franchise  or  business  into  the  treasury  of  this  State  annually, 
to  be  computed,"  according  to  certain  specified  circumstances,  upon 
the  capital  stock  or  its  valuation,  made  in  accordance  with  the  pro- 
visions of  the  first  section  of  the  act. 
The  word  "incorporated,"  as  here  used,  is  not  to  be 


PLATT  V.  WEMPLE.  367 

taken  in  a  technical  or  restricted  meaning  and  confined  to  an  asso- 
ciation brought  into  being  according  to  the  formula  of  a  statute,  but 
as  including  any  combination  of  individuals  upon  terms  which  em- 
body or  adopt  as  rules  or  regulations  of  business  the  enabling  pro- 
visions of  the  statutes. 

In  the  case  before  us  the  agreement,  which  brought  many  persons 
into  one  artificial  body,  was  so  framed  as  to  accomplish  that  end. 
and  in  proposing  to  conduct  its  affairs  by  the  power  given  to  it  in 
the  mode  prescribed  by  the  legislature,  they  must  be  deemed,  for 
the  purposes  of  the  act  in  question,  to  be  incorporated,  that  is, 
formed  or  united  under  the  law  of  the  state  whether  the  artificial 
body  be  termed  a  corporation,  a  joint-stock  company  or  association. 

Xor  is  the  principal  question  altogether  new.  In  Waterbury  v. 
Merchants'  Union  Express  Company  (50  Barb.  158)  the  nature  and 
legal  character  of  the  defendant,  a  joint-stock  association,  created 
in  like  manner  with  the  one  before  us,  was  held  to  have  all  the  at- 
tributes of  a  corporation,  and  all  its  incidents  except  a  common 
seal.  The  statutes  from  1849  to  1867  were  examined  and  held  to 
confer  the  qualities  which  distinguish  a  corporation  from  a  part- 
nership, and  to  establish  the  relations  of  a  member  of  the  associa- 
tion as  those  of  a  stockholder  in  a  corporation,  and  not  those  of  an 
individual  in  a  partnership,  and  that,  in  controversies  affecting 
them,  the  analogies  afforded  by  laws  and  jurisprudence  in  the  case 
of  corporations  should  be  followed,  and  not  those  derived  from  a 
simple  partnership.  In  Westcott  v.  Fargo,  president  of  the  same 
company  (6  Lans.  319),  a  like  discussion  was  had  upon  circum- 
stances calling  for  a  decision  as  to  the  nature  and  character  of  the 
association.  A  shareholder  sued  the  company  for  the  loss  of  freight 
intrusted  to  it.  It  was  set  up  as  a  defense  that  the  plaintiff,  as 
such  shareholder,  was  one  of  the  owners  of  interest  in  the  express 
company;  but  the  court  held  otherwise — that  it  was  no  valid  ob- 
jection that  the  plaintiff  was  a  member  of  that  company — saying: 
"The  action  is  against  the  corporation,"  and,  so,  the  plaintiff  pre- 
vailed. Upon  appeal  the  case  came  to  this  court  (61  N.  Y.  542), 
and  again  the  issue  was  distinctly  presented.  The  appellant  con- 
tended that  the  plaintiffs  could  not  maintain  an  action  upon  a  con- 
tract between  themselves  and  the  association  of  which  they  were 
members;  that  their  remedy  was  in  equity  for  an  accounting  as  in 
partnership  cases;  while,  for  the  respondent,  it  was  argued  that 
"joint-stock  companies,  organized  under  the  statutes  of  the  state 
are  corporations,  not  partnerships."  This  court  also  examined  the 
statutes  relating  to  joint  stock  companies  and  came  to  the  conclu- 


368  LISTING  OF  PERSONS  AND  VALUATION. 

feion  that  they  conferred  powers  and  privileges  of  corporations  not 
possessed  by  individuals  or  partnerships. 

We,  therefore,  agree  with  the  Supreme  Court  and  think  its  order 
should  be  affirmed. 

All  concur;  ANDREWS,  J.,  in  result. 
Order  affirmed. 

Sec  to  the  same  effect  Liverpool  Ins.  Co.  v.  Mass.,  10  Wall.  56ft. 


PEOPLE  V.  EQUITABLE  TRUST  COMPANY. 

Court  of  Appeals  of  New  York.    June,  1884' 
96  New  York,  387. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court,  in  the  third  judicial  department,  entered  upon  an  order  made 
January  23,  1883,  which  affirmed  a  judgment  in  favor  of  plain- 
tiff, entered  upon  a  decision  of  the  court  on  trial,  without  a  jury. 

EARL,  J.  This  action  was  brought  by  the  attorney-general 
against  the  defendant,  a  foreign  corporation,  to  recover  the  sum  of 
$1,575,  which,  it  is  claimed,  the  defendant  should  have  paid  into 
the  treasury  of  the  State  within  fifteen  days  from  January  1,  1882, 
under  section  2  of  the  act,  chapter  542  of  the  Laws  of  1880,  as 
amended  by  chapter  361  of  the  Laws  of  1881. 

The  defendant  is  a  Connecticut  corporation,  and  for  many  years 
did  business  through  its  officers  in  that  State.  Its  business  was 
the  negotiating  of  loans  on  mortgages  in  the  western  states,  or  the 
purchase  of  obligations  secured  by  mortgages  in  those  States,  and 
the  selling  of  securities  based  on  those  loans  and  obligations.  But 
during  the  year  ending  November  1,  1881,  it  did  but  little  busi- 
ness and  made  but  few  loans,  being  engaged  in  caring  for  its  old 
business  of  previous  years,  and  looking  after  its  real  estate.  During 
that  time  its  sales  of  securities  were  very  light,  and  were  mostly 
made  in  foreign  countries.  During  the  eight  years  prior  to  the 
commencement  of  this  action,  it  had  an  office  for  the  transaction 
of  business  in  the  city  of  New  York;  but  a  very  small  portion  of 
its  property  was  in  this  State,  and  but  little  of  its  business  was 
done  here. 

The  main  contention  on  the  part  of  the  defendant  is  that  there 


PEOPLE  V.  EQUITABLE  TRUST  CO.       369 

is  no  constitutional  authority  for  imposing  the  tax  or  enforcing  its 
collection.  It  is,  therefore,  important  first  to  determine  the  mean- 
ing of  the  act  so  far  as  it  bears  upon  this  case. 

The  act  is  entitled  "An  act  to  provide  for  raising  taxes  for  the 
use  of  the  State  upon  certain  corporations,  joint-stock  companies 
and  associations."  Section  1  provides  for  the  report  as  to  divi- 
dends, and  the  appraisal  of  the  capital  stock  of  corporations  in 
cases  where  no  dividends  have  been  declared  or  the  dividends  have 
been  less  than  six  per  centum.  Section  3,  so  far  as  it  is  now  im- 
portant, is  as  follows:  "Every  corporation,  joint-stock  company  or 
association  whatever,  now  or  hereafter  incorporated  or  organized  by 
or  under  the  laws  of  this  State,  or  now  or  hereafter  incorporated  or 
organized  by  or  under  the  laws  of  any  other  State  or  country,  and 
doing  business  in  this  State,  except  savings  banks  and  institutions 
for  savings,  life  insurance  companies,  banks  and  foreign  insurance 
companies,  and  manufacturing  corporations  carrying  on  manufac- 
tures within  this  State,  which  exceptions  shall  not  be  taken  to  in- 
clude gas  companies  or  trust  companies,  shall  be  subject  to  and  pay 
a  tax,  as  a  tax  upon  its  corporate  franchise  or  business,  into  the 
treasury  of  the  State  annually,  to  be  computed  as  follows:  If  the 
dividend  or  dividends  made  or  declared  by  such  corporation,  joint- 
stock  company  or  association,  during  any  year  ending  with  the  first 
day  of  November,  amount  to  six  or  more  than  six  per  centum  upon 
the  par  value  of  its  capital  stock,  then  the  tax  to  be  at  the  rate  of 
one-quarter  mill  upon  the  capital  stock  for  each  one  per  centum  of 
dividends  so  made  or  declared;  or  if  no  dividend  be  made  or  de- 
clared, or  if  the  dividend  or  dividends  made  or  declared  do  not 
amount  to  six  per  centum  upon  the  par  value  of  said  capital  stock, 
then  the  tax  to  be  at  the  rate  of  one  and  one-half  mills  upon  each 
dollar  of  valuation  of  the  said  capital  stock  made  in  accordance 
with  the  provisions  of  the  first  section  of  this  act." 

The  defendant,  being  a  foreign  corporation,  could  not  be  taxed 
here  in  reference  to  its  property  situate  out  of  this  State,  and  its 
business  not  done  here.  Nor  could  it  be  taxed  on  account  of  its 
corporate  franchise,  as  that  was  not  given  by  our  laws,  was  de- 
pendent upon  the  laws  of  the  State  of  its  creation,  and  had  no  ex- 
istence separate  therefrom.  A  corporation  may,  through  its  agents, 
extend  its  operations  into  other  •  States,  and  thus,  metaphorical!} 
speaking,  go  there;  but  it  never  really  travels  and  its  franchises 
exist  only  at  the  place  of  its  domicile  and  residence.  (Plimpton  V. 
Bigelow,  93  X.  Y.  592.) 
24 


370  LISTING  OF  PERSONS  AND  VALUATION. 

So  far  as  section  3  imposes  a  tax  upon  corporate  franchises,  its 
operation  must,  therefore,  be  confined  to  corporations  created  under 
our  laws;  and  as  to  foreign  corporations  the  tax  is  imposed  solely 
upon  business.  The  counsel  for  the  appellant,  however,  claims  that 
the  tax  is  imposed  upon  all  the  business  of  such  corporations, 
whether  done  in  this  State  or  elsewhere,  and  hence  that  this  tax 
upon  the  business  of  this  corporation,  mostly  done  without  the 
State,  was  wholly  unauthorized.  If  the  proper  construction  of  this 
act  requires  us  to  hold  that  this  tax  was  imposed  upon  all  the  busi- 
ness of  this  corporation  it  is,  as  I  understand,  conceded  by  the  at- 
torney-general that  it  cannot  be  enforced.  We  are  of  opinion  that 
this  was  a  tax  imposed  upon  the  business  of  this  corporation  done 
within  this  State. 

The  legislature  was  dealing  with  the  subject  of  taxing  foreign 
corporations  doing  business  in  this  State,  and  taxing  them  only  be- 
cause they  did  business  in  this  State,  and  having  the  right  to  tax 
them  only  upon  business  done  in  this  State.     Under  such  circum- 
stances,    .    ..     .     .     .     if  there  was  nothing  else  in  the  statute  to 

throw  light  upon  the  legislative  intent,  we  would  be  obliged  to  hold 
that  the  word  "business"  had  reference  to  business  done  within  this 
State.  But  other  parts  of  the  statute  make  this  plain.  In  the 
earlier  part  of  the  section  the  words  "doing  business  in  this  State" 
are  used,  and  when  the  word  "business"  is  used  later  it  has  ref- 
erence to  the  same  business  which  was  then  in  the  legislative  mind. 
Then  the  whole  framework  of  the  act  shows  that  the  legislature  was 
conscious  of  the  limitations  upon  its  powers.  Foreign  insurance 
companies,  and  railroad  and  other  transportation  companies,  were 
made  liable  to  pay  a  tax,  in  plain  terms,  only  upon  business  done 
in  this  State.  It  cannot  be  supposed  that  the  legislature  meant  to 
tax  some  foreign  corporations  doing  business  in  this  State  upon  all 
their  business  done  anywhere,  and  tax  others  only  upon  their  busi- 
ness done  in  this  State.  There  can  be  no  reason  for  such  discrim- 
ination, and  it  clearly  was  not  intended. 

We  have,  therefore,   reached   the  conclusion  that  this  judgment 
should  be  affirmed. 

All  concur,  except  ANDREWS,  J.,  not  voting. 
Judgment  affirmed. 


COMMONWEALTH  V.  N.  Y.,  L.  E.  &  W.  R.  CO.        371 


COMMONWEALTH  V.  N.  Y.,  L.  E.  &  W.  R.  CO. 

Supreme  Court  of  Pennsylvania.     October,  1889. 
129  Pennsylvania  State,  463. 

Opinion,  Mr.  Justice  CLARK. 

This  case  came  into  the  Common  Pleas  of  Dauphin  county  upon  an 
appeal  from  a  settlement  made  by  the  auditor  general,  etc.,  for  state 
taxes  on  corporate  loans,  under  the  fourth  section  of  the  act  of  June 
30,  1885,  for  the  year  1887.  It  was  tried  by  the  court  by  agreement 
of  the  parties  under  the  act  of  1874.  The  learned  judge  of  the  court 
below  found  as  matter  of  fact  that  $2,378,000  of  the  company's  bonds 
were  owned  and  possessed  by  residents  of  Pennsylvania,  of  which 
$852,000  were  held  by  individuals,  and  the  residue  by  corporations. 
The  principal  questions  raised  on  this  record  are  ruled  by  Common- 
wealth v.  Delaware  Div.  Canal  Co.,  123  Pa.,  594;  Lehigh  Valley  R. 
Co.  v.  Commonwealth,  and  Commonwealth  v.  Lehigh  Valley  R.  Co., 
the  last  two  cases  decided  at  this  term  and  not  yet  reported  (ante, 
429).  The  only  remaining  question  for  our  consideration  is,  whether 
or  not  the  defendant  company,  being  a  foreign  corporation  is  liable 
to  be  charged  with  State  taxes  at  the  rate  of  three  mills  on  the  dollar 
on  their  bonds  held  by  individuals  and  firms  resident  within  the  state, 
as  above  stated. 

The  Xew  York,  Lake  Erie  and  Western  Railroad  Company  is  a 
corporation  of  the  state  of  New  York.  It  was  originally  incorporated 
in  the  year  1832,  as  the  New  York  &  Erie  Railroad  Company,  with 
power  to  construct  a  railroad  from  the  city  of  New  York  to  Lake 
Erie,  through  the  southern  counties  of  the  state  of  New  York.  To 
avoid  certain  engineering  difficulties,  the  company  was  afterwards 
authorized  by  the  legislature  of  Pennsylvania,  under  certain  restric- 
tions to  build  a  specific  portion  of  its  road  through  the  counties  of 
Pike  and  Susquehanna,  in  this  state;  acts  of  February  16.  1841,  P.  L. 
28.  and  March  26,  1846,  P.  L.  179;  the  said  company,  by  the 
act  of  1846,  being  required  to  pay  to  the  state  of  Pennsylvania,  after 
the  completion  of  the  road,  the  sum  of  $10,000  annually.  The  prop- 
erty and  franchises  of  the  New  York  &  Erie  Railroad  Company 
afterwards  became  vested  in  the  Erie  Railway  Company,  and,  in 
1878,  in  the  New  York,  Lake  Erie  and  Western  Railroad  Company. 
A  portion  of  the  defendant's  road  was  made  and  is  still  maintained 
within  the  limits  of  this  state,  and  since  the  completion  and  equip- 
ment of  the  road  regular  payment  has  been  made  by  the  company 
to  the  commonwealth  of  the  said  sum  of  $10,000  annually,  pursu- 


372  LISTING  OF  PERSONS  AND  VALUATION. 

ant  to  the  provisions  of  the  several  acts  of  assembly  already  referred  to. 
Although  a  corporation  of  another  state,  and,  therefore,  a  foreign 
corporation,  the  company  is  doing  business  in  this  state.  By  a  cer- 
tificate filed  in  the  ofiice  of  the  secretary  of  the  commonwealth,  pursu- 
ant to  the  act  of  22d  April,  1874,  the  defendants  have  designated  a 
place  of  business  and  an  agent  to  represent  them;  they  are,  there- 
fore, not  only  duly  authorized  but,  in  their  operation  of  their  road, 
they  are  actually  engaged  in  doing  business  within  the  limits  of  this 
state. 

The  fourth  section  of  the  act  of  1885  applies  not  only  to  all 
private  corporations,  created  by  and  under  the  laws  of  this  state  or 
of  the  United  States,  but  to  such  as  are  doing  business  in  this  com- 
monwealth. 

The  only  question  raised  by  the  remaining  assignments  are,  first, 
whether  the  provision  of  the  fourth  section  of  the  act  of  1885,  so 
far  as  it  applies  to  foreign  corporations  doing  business  in  this 
state,  is  a  proper  exercise  of  legislative  power;  and,  second,  assum- 
ing this  to  be  .so,  whether  there  is  anything  in  the  said  provision  by 
which  the  defendant  road  was  permitted  to  pass  through  the  counties 
of  Pike  and  Susquehanna,  which  would  exempt  the  company  from 
the  obligation  of  this  act. 

Upon  the  first  question  suggested,  there  can,  we  think,  be  but 
little  room  for  discussion.  In  the  Delaware  Div.  Canal  Company  case, 
already  referred  to,  we  said: 

"Foreign  corporations,  exercising  their  franchises  under  the  laws 
of  other  states  and  countries,  are  beyond  the  reach  of  our  process  of 
taxation.  We  could  not  require  them  ordinarily  to  comply  with  any 
such  regulation  of  our  law,  and,  therefore,  they  are  necessarily 
excluded  from  the  provisions  of  the  act.  Such  foreign  corporations 
as  are  engaged  in  business  in  the  state  might  doubtless  be  required 
to  comply  as  a  condition  of  their  right  so  to  do,  but  this  could  only 
embarrass  the  action  of  the  local  assessor,  and  upon  this  ground, 
doubtless,  they  were  wisely  excluded  from  the  operation  of  the  act." 

The  last  member  of  the  concluding  sentence  of  the  paragraph 
quoted  is  a  mere  inadvertence.  The  fourth  section  of  the  act  of  1885 
does  in  terms  embrace  such  foreign  corporations  as  are  engaged  in 
business  in  this  state,  and  the  question  now  to  be  considered  is, 
whether  or  not  such  a  provision  as  respects  the  New  York,  Lake  Erie 
&  Western  Railroad  Company  is  a  proper  exercise  of  the  legislative 
power  of  the  state.  The  general  statement  that  foreign  corporations 
are  ordinarily  beyond  the  reach  of  our  processes  of  taxation  is  un- 


COMMONWEALTH  V.  X.  Y.,  L.  E.  &  W.  R.  CO.        373 

doubtedly  correct,  but  when  a  foreign  corporation  comes  into  Penn- 
sylvania and  engages  in  business  here,  undoubtedly  it  does  so  subject 
itself  to  the  general  policy  of,  and  the  course  of  legislation  in  the 
state:  Runyan  v.  Coster,  14  Pet.  122.  A  foreign  corporation  can 
exercise  its  franchises  in  Pennsylvania  only  in  so  far  as  it  may  be 
permitted  by  the  local  sovereign.  The  right  rests  wholly  in  the  com- 
ity of  the  states:  Paul  v.  Virginia,  8  Wall.  168.  A  corporation  oi 
one  state  cannot  do  business  in  another  state  without  the  latter's  con- 
sent, express  or  implied,  and  that  consent  may  be  accompanied  with 
such  conditions  as  the  latter  may  think  proper  to  impose:  St.  Clair 
v.  Cox,  106  U.  S.,  350.  These  conditions  will  be  valid  and  effectual, 
provided  they  are  not  repugnant  to  the  constitution  or  laws  of  the 
United  States,  inconsistent  with  the  jurisdietional  authority  of  the 
state,  or  in  conflict  with  the  rule  which  forbids  condemnation  without 
opportunity  for  defense:  Lafayette  Insurance  Co.  v.  French,  18 
How.  404 ;  Doyle  v.  Insurance  Co.,  94  U.  S.  535 ;  Pembina  Mfg.  Co. 
v.  Pennsylvania,  125  U.  S.  181. 

It  was  competent  for  the  legislature  of  Pennsylvania  to  impose  as 
a  condition  upon  foreign  corporations  doing  business  in  this  state 
that  they  shall  assess  and  collect  the  tax  upon  that  portion  of  their 
loans  in  the  hands  of  individuals  resident  within  the  state,  and  other- 
wise comply  with  the  provisions  of  the  act  of  1885.  The  act  imposes 
no  tax  upon  the  company;  it  simply  defines  a  duty  to  be  performed 
and  fixes  a  penalty  for  disregard  of  that  duty.  The  legislature  hav- 
ing so  provided,  compliance  with  the  act  may,  in  some  sense,  be  said 
to  form  one  of  the  conditions  upon  which  corporations  may  do 
business  within  the  state,  and  the  corporation  continuing  its  business 
subsequently  would  be  taken  to  have  assented  thereto. 

There  is,  however,  a  condition,  implied  even  in  the  case  of  domestic 
corporations,  that  they  will  be  subject  to  such  reasonable  regulations, 
in  respect  to  the  general  conduct  of  their  affairs,  as  the  legislature 
may  from  time  to  time  prescribe,  and  such  as  do  not  materially 
interfere  with  or  obstruct  the  substantial  enjoyment  of  the  privileges 
the  state  has  granted:  Chicago  v.  Needles,  113  U.  S.  574.  If  this 
be  so  as  to  corporations  who  are  entitled  to  their  charter  privileges 
upon  the  footing  of  a  contract,  how  much  the  more  is  it  so  as  to 
corporations  who  are  merely  permitted  by  the  legislature  to  do 
business  within  this  state  as  a  matter  of  grace  and  not  of  right?  But 
it  is  said  that  the  enforcement  of  the  fourth  section  of  the  act  of 
1885  against  the  defendant  corporation  would  impair  the  obligation 
of  the  contract  existing  between  the  commonwealth  and  the  company, 
as  set  forth  in  the  private  statutes  of  1841  and  1846  already  referred 


374          LISTING  OF  PEESONS  AND  VALUATION. 

to.  Apart  from  these  statutes  the  defendant  had  the  right  by  the 
comity  of  the  states  to  contract  and  to  sue  within  the  state  of  Penn- 
sylvania, but  could  exercise  no  extraordinary  franchises  or  special 
privileges  granted  by  the  state  incorporating  it,  as,  for  instance, 
the  right  to  eminent  domain,  or  the  privilege  of  exemption  from  tax- 
ation :  State  v.  Boston,  etc.  R.  Co.  25  Vt.  433 ;  Middle  Bridge  Co.  v. 
Marks,  26  Me.  326 ;  Taylor  on  Corp.,  386.  It  was  for  the  exercise  of 
this  extraordinary  privilege  and  power  of  the  state,  the  annual  pay- 
ment of  $10,000  was  stipulated.  There  is  nothing  in  the  act  to  indi- 
cate that  this  sum  was  paid  in  lieu  of  taxes,  or  for  exemption  from 
any  duty  which  might  otherwise  be  imposed  upon  the  company,  but 
for  the  privilege  of  exercising  the  right  of  eminent  domain  in  the 
location  of  their  road  through  the  counties  mentioned,  under  restric- 
tions particularly  specified.  The  effect  of  these  acts  of  1841  and 
1846  was  not  to  declare  the  company  a  corporation  of  the  com- 
monwealth, but,  as  Mr.  Justice  Thompson  said  in  New  York  &  Erie 
B.  Co.  v.  Young,  33  Pa.  175,  "for  the  purposes  of  these  acts  the 
rights  involved  are  to  be  tested  and  judged  by  the  same  rules  of  law 
as  if  the  company  had  been  primarily  incorporated  by  this  common- 
wealth. So  far  as  the  road  runs  through  this  state  under  the  privi- 
leges granted  to  it,  the  company  is  a  quasi  Pennsylvania  corporation. 
The  right  of  eminent  domain,  within  the  restrictions  of  the  grant, 
was  as  fully  conferred  on  them  by  the  act  of  February  16,  1841,  as  it 
ever  is  conferred  on  corporations  exclusively  within  the  state,  and 
their  rights  and  duties  under  the  privileges  granted  must  be  ruled  by 
the  same  principles."  One  state  may  make  a  corporation  of  another 
state,  as  there  organized  and  conducted,  a  corporation  of  its  own, 
quoad  property  within  its  territorial  jurisdiction:  Railroad  Co.  v. 
Harris,  12  Wall.  65-82;  Graham  v.  Railroad  Co.  118  Pa.  (?)  168. 
Thus  it  will  be  seen  that  the  defendant  exercises  powers  and  franchises 
which  they  have  received  directly  from  the  legislation  of  Pennsyl- 
vania; that  a  part  of  their  property  is  actually  within  the  limits  of 
this  state,  and  receives  the  protection  of  our  laws,  and  there  is  no 
good  reason  why  the  company  should  not  be  held  subject  to  the  same 
regulations  as  corporations  of  our  own  state.  We  are  of  opinion 
that  on  this  branch  of  the  case  the  court  was  right. 

The  judgment  is  affirmed. 

This  general  principle  has  been  upheld  by  the  Supreme  Court  of  the  United 
States  as  to  domestic  corporations,  Bell's  Gap  R.  R.  Co  v.  Penna.  134  U.  S. 
232 ;  but  was  not  permitted  to  be  applied  in  the  case  of  a  foreign  corporation 
as  to  payments  of  interest  even  to  bondholders  residing  in  the  state,  where 
such  payments  were  made  in  another  state.  Erie  R.  R.  Co.  v.  Penna  153 
U.  S.  628. 


PEOPLE  V.  HORN  SILVER  MINING  CO.  375 


PEOPLE  V.  HORN  SILVER  MINING  CO. 

Court  of  Appeals  of  New  York.    March,  1887. 
105  New  York,  76. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court, 
in  the  third  judicial  department,  entered  upon  an  order  made  Novem- 
ber 17,  1885,  which  affirmed  a  judgment  in  favor  of  plaintiff,  entered 
upon  the  report  of  a  referee.  (Reported  below,  38  Hun.  276.) 

The  nature  of  the  action  and  the  material  facts  are  stated  in  the 
opinion. 

EABL,  J.  This  action  was  commenced  to  recover  certain  taxes 
claimed  to  be  due  from  the  defendant  under  chapter  542  of  the 
Laws  of  1880,  as  amended  by  chapter  3G1,  of  the  Laws  of  1881,  and 
chapter  151  of  the  Laws  of  1882. 

Second.  It  is  claimed  that  the  defendant  was  not,  during  the 
years  1881  and  1882  "doing  business  in  this  State/'  and  that,  there- 
fore it  was  not  liable  to  taxation  under  the  act  of  1881.  It  is  quite 
true  that  by  far  the  larger  share  of  its  business  was  carried  on  in 
Utah,  and  at  Chicago.  But  its  president,  secretary  and  treasurer  had 
their  offices  in  New  York;  the  directors  held  their  annual  meetings 
there;  its  dividends  were  declared  and  paid  there;  its  silver  bullion 
was  all  sent  there  and  sold  there  and  the  proceeds  of  it  received  there ; 
some  of  the  proceeds  were  deposited  in  banks,  some  loaned  in  the  city 
of  New  York  and  some  of  it  used  for  the  purposes  of  the  company  in 
that  city,  and  the  balance  was  transferred  to  Chicago  and  Utah  for 
use  in  the  business  of  the  company.  There  was  thus  a  very  substan- 
tial portion  of  its  business  done  in  the  city  of  New  York.  The  busi- 
ness did  not  consist  of  occasional  transactions,  but  an  office  was  kept 
there,  and  the  business  continuously  transacted  there  during  the 
whole  year.  We  cannot  construe  the  words  "doing  business  in  this 
State"  to  mean  the  whole  business  of  the  corporation  within  this 
State ;  and  while  we  are  not  prepared  to  hold  that  an  occasional  busi- 
ness transaction,  that  keeping  an  office  where  meetings  of  the  directors 
are  held,  transfer  books  kept,  dividends  declared  and  paid,  and 
other  business  merely  incidental  to  the  regular  business  of  the  corpo- 
ration is  done  would  bring  a  corporation  within  this  act;  yet  when, 
as  in  this  case,  all  these  things  are  done  and  in  addition  thereto  a 
substantial  part  of  the  regular  business  of  the  corporation  is  carried 
on  here,  then  we  are  unable  to  say  that  the  corporation  is  not  brought 
within  the  act  as  one  "doing  business  in  this  State."  There  is  no 


376          LISTING  OF  PERSONS  AND  VALUATION. 

injustice  in  subjecting  to  taxation  such  a  corporation  enjoying  the 
benefits  of  our  great  mart,  the  advantages  of  our  social  order  and  the 
protection  of  our  laws. 

Third.  It  is  further  claimed  that  in  computing  the  taxes,  only 
the  amount  of  defendant's  capital  employed  within  this  State  should 
have  been  taken  as  the  basis  and  not  its  entire  capital.  We  do  not 
perceive  how  it  is  possible  to  limit  the  computation  of  the  taxes  as 
thus  claimed.  .  .  .  ;  .  ,  . 

It  is  very  clear  from  this  review  of  the  two  sections,  that  the 
whole  capital  stock,  the  same  stock  upon  which  dividends  are  declared 
and  paid,  is  to  be  taken  as  the  basis  of  taxation.  And  so  we  held  in 
People  v.  Equitable  Trust  Co.  (96  N.  Y.  387),  where  we  said  that 
"we  find  no  authority  in  this  act  for  apportioning  a  tax  upon  such  a 
corporation  as  this  upon  the  amount  of  dividends  earned  in  this 
State,  or  upon  the  amount  of  capital  stock  employed  in  this  State." 

Our  conclusion  is  that  the  judgment  should  be  affirmed,  with  costs. 
All  concur  except  PECKHAM,  J.,  dissenting  and  RAPALLO,  J.,  not 
voting. 

Judgment  affirmed. 


HORN  SILVER  MINING  CO.  V.  NEW  YORK  STATE. 

Supreme  Court  of  the  United  States.     February,  1892. 
134  United  States,  305. 

Mr.  Justice  FIELD  delivered  the  opinion  of  the  court. 

A  corporation  being  the  mere  creature  of  the  legislature,  its  rights, 
privileges  and  powers  are  dependent  solely  upon  the  terms  of  its 
charter.  .  .  .  The  right  and  privilege,  or  the  franchise,  as  it  may 
be  termed,  of  being  a  corporation,  is  of  great  value  to  its  members, 
and  is  considered  as  property  separate  and  distinct  from  the  property 
which  the  corporation  itself  may  acquire.  According  to  the  law  of 
most  States  this  franchise  or  privilege  of  being  a  corporation  is 
deemed  personal  property,  and  is  subject  to  separate  taxation. 

The  granting  of  the  rights  and  privileges  which  constitute  the 
franchises  of  a  corporation  being  a  matter  resting  entirely  within  the 
control  of  the  legislature,  to  be  exercised  in  its  good  pleasure,  it  may 
be  accompanied  with  any  such  conditions  as  the  legislature  may  deem 
most  suitable  to  the  public  interests  and  policy.  It  may  impose  as  a 


HORN  SILVER  MINING  CO.  V.  NEW  YORK.         3V f 

condition  of  the  grant,  as  well  as,  also,  of  its  continued  exercise,  the 
payment  of  a  specific  sum  to  the  State  each  year,  or  a  portion  of  the 
profits  or  gross  receipts  of  the  corporation,  and  may  prescribe  such 
mode  in  which  the  sum  shall  be  ascertained  as  may  be  deemed  con- 
venient and  just.  There  is  no  constitutional  inhibition  against  the 
legislature  adopting  any  mode  to  arrive  at  the  sum  which  it  will  exact 
as  a  condition  of  the  creation  of  the  corporation  or  of  its  continued 
existence.  There  can  be,  therefore,  no  possible  objection  to  the 
validity  of  the  tax  prescribed  by.  the  statute  of  New  York,  so  far  as 
it  relates  to  its  own  corporations.  Nor  can  there  be  any  greater  objec- 
tion to  a  similar  tax  upon  a  foreign  corporation  doing  business  by  its 
permission  within  the  State.  As  to  a  foreign  corporation — and  all 
corporations  in  States  other  than  the  State  of  its  creation  are  deemed 
to  be  foreign  corporations — it  can  claim  a  right  to  do  business  in 
another  State,  to  any  extent,  only  subject  to  the  conditions  imposed  by 
its  laws. 

This  doctrine  has  been  so  frequently  declared  by  this  court  that  it 
must  be  deemed  no  longer  a  matter  of  discussion,  if  any  question  can 
ever  be  considered  at  rest. 

Only  two  exceptions  or  qualifications  have  been  attached  to  it  in 
all  the  numerous  adjudications  in  which  the  subject  has  been  con- 
sidered, since  the  judgment  of  this  court  was  announced  more  than 
half  a  century  ago  in  Bank  of  Augusta  v.  Earle,  13  Pet.  519.  One 
of  these  qualifications  is  that  the  State  cannot  exclude  from  its 
limits  a  corporation  engaged  in  interstate  or  foreign  commerce,  estab- 
lished by  the  decision  in  Pensacola  Telegraph  Co.  v.  Western  Union 
Telegraph  Co.  96  U.  S.  1,  12.  The  other  limitation  on  the  power  of 
the  State  is,  where  the  corporation  is  in  the  employ  of  the  general 
government,  an  obvious  exception,  first  stated,  we  think,  by  the 
late  Mr.  Justice  Bradley  in  Stockton  v.  Baltimore  &  New  York  Rail- 
road, 32  Fed.  9,  14.  As  that  learned  justice  said:  "If  Congress 
should  empio)'  a  corporation  of  ship-builders  to  construct  a  man-of- 
war,  they  would  have  the  right  to  purchase  the  necessary  timber  and 
iron  in  any  State  of  the  Union."  And  this  court,  citing  this  passage, 
added,  "without  the  permission  and  against  the  prohibition  of  the 
State."  Pembina  Mining  Co.  v.  Pennsylvania,  125  U.  S.  181,  186. 

Having  absolute  power  of  excluding  the  foreign  corporation  the 
State  may,  of  course,  impose  such  conditions  upon  permitting  the 
corporation  to  do  business  within  its  limits  as  it  may  judge  expe- 
dient; and  it  may  make  the  grant  or  privilege  dependent  upon  the 
payment  of  a  specific  license  tax,  or  a  sum  proportioned  to  the 


378          LISTING  OF  PEKSONS  AND  VALUATION. 

amount  of  its  capital.  No  individual  member  of  the  corporation,  or 
the  corporation  itself,  can  call  in  question  the  validity  of  any  exaction 
which  the  State  may  require  for  the  grant  of  its  privileges.  It  does 
not  lie  in  any  foreign  corporation  to  complain  that  it  is  subjected  to 
the  same  law  with  the  domestic  corporation.  The  counsel  for  the 
appellant  objects  that  the  statute  of  New  York  is  to  be  treated  as 
a  tax  law,  and  not  as  a  license  to  the  corporation  for  permission  to 
do  business  in  the  State.  Conceding  such  to  be  the  case  we  do  not 
perceive  how  it  in  any  respect  affects  the  validity  of  the  tax.  How- 
ever it  may  be  regarded,  it  is  the  condition  upon  which  a  foreign 
corporation  can  do  business  in  the  State,  and  in  doing  such  business 
it  puts  itself  under  the  law  of  the  State,  however  that  may  be  charac- 
terized. 

The  only  question  therefore  open  to  serious  consideration  in  this 
case  is  one  of  fact :  Did  the  Horn  Silver  Mining  Company  do  business 
as  a  corporation  within  the  State?  The  reference  found  such  to  be 
the  fact,  as  a  conclusion  from  many  probative  circumstances  in  the 
case.  That  finding  was  never  set  aside,  but  stands  approved  by  the 
courts  of  New  York. 

There  seems  to  be  a  hardship  in  estimating  the  amount  of  the  tax 
upon  the  corporation,  for  doing  business  within  the  State,  according 
to  the  amount  of  its  business  or  capital  without  the  State.  That  is 
a  matter,  however,  resting  entirely  in  the  control  of  the  State,  and 
not  a  matter  of  Federal  law,  and  with  which,  of  course,  this  court 
can  in  no  way  interfere. 

Since  this  tax  was  levied  the  law  of  the  State  has  been  altered,  and 
now  the  tax  upon  foreign  corporations  doing  business  in  the  State 
is  estimated  by  the  consideration  only  of  the  capital  employed  within 
the  State.  It  is  said  that  against  nearly  all  other  foreign  corporations, 
except  this  one,  the  taxes  upon  their  franchises  have  been  computed 
upon  the  basis  of  the  capital  employed  within  the  State;  but  as  to 
that  we  can  only  repeat  what  was  said  in  the  Court  of  Appeals  of  the 
State,  that,  if  this  be  true,  the  defendant  may  have  reason  to  complain 
of  unjust  discrimination  and  may  properly  appeal  for  relief  to  the 
legislature  of  the  State,  but  that  it  is  not  within  the  power  of  the 
court  to  grant  any  relief  however  great  the  hardship  upon  it. 

The  extent  of  the  tax  is  a  matter  purely  of  state  regulation,  and 
any  interference  with  it  is  beyond  the  jurisdiction  of  this  court. 
The  objection  that  it  operates  as  a  direct  interference  with  interstate 
commerce  we  do  not  think  tenable.  The  tax  is  not  levied  upon 
articles  imported,  nor  is  there  any  impediment  to  their  importation. 


PEOPLE  EX  EEL.  HOYT  V.  COMMISSIONERS.       37!) 

The  products  of  the  mine  can  be  brought  into  the  State  and  sold  there 
without  taxation,  and  they  can  be  exhibited  there  for  sale  in  any 
office  or  building  obtained  for  that  purpose;  the  tax  is  levied  only 
upon  the  franchise  or  business  of  the  company. 

Judgment  affirmed. 
Mr.  Justice  HARLAN  dissented. 

Taxes  discriminating  against  foreign  corporations  as  compared  with 
domestic  corporations  are  perfectly  proper  provided  they  do  not  violate  the 
interstate  commerce  provision  of  the  constitution.  Paul  v.  Virginia,  8  Wallace 
183 ;  see  also  Firemen's  Fund  v.  Roome,  93  N.  Y.  313.  But  the  state  cannot 
exclude  from  its  limits  a  corporation  engaged  in  interstate  commerce.  McCall 
v.  California,  136  U.  S.  104,  and  Norfolk  &  Western  R.  R.  Co.  v.  Pennsylvania, 
136  U.  S.  114.  As  to  the  taxation  of  domestic  corporations  see  Home  Insur- 
ance Co.  v.  New  York,  134  U.  S.  594;  Philadelphia  and  Southern  Steamship 
Co.  v.  Pennsylvania,  122  U.  S.  326;  State  Tax  on  Railway  Gross  Re- 
ceipts, 15  Wallace  (U.  S.)  284;  case  of  the  State  Freight  Tax,  15  Wallace  (U. 
S.)  23  supra.  For  state  taxation  of  foreign  corporations  see  Western  Union 
Telegraph  Co.  v.  Borough  of  New  Hope,  187  U.  S.  419 ;  Ratterman  v.  Western 
Union  Telegraph  Co.  127  U.  S.  411;  Pickard  v.  Pullman,  etc.,  Co.  117  U.  S. 
34  supra;  and  Pullman,  etc.,  Co.  v.  Pennsylvania,  141  U.  S.  18,  Adams  Express 
Co.  v.  Ohio  State  Auditor,  165  U.  S.  194;  Gloucester  Ferry  Co.  v.  Pennsyl-  / 
vania,  114  U.  S.  196  supra. 


IV.    SITUS  OF  PROPERTY. 
PEOPLE  EX  REL  HOYT  V.  COMMISSIONERS. 

Court  of  Appeals  of  New  York.    June,  1861. 
23  New  York,  224- 

Appeal  from  the  Supreme  Court.  Upon  a  certiorari  to  the  Com- 
missioners of  Taxes  and  Assessments  for  the  city  and  county  of  New 
York,  they  made  a  return  from  which  these  facts  appeared :  The 
relator  was  assessed  $4,000  for  personal  property.  He  applied  for 
a  correction  of  the  assessment,  and  testified  that  the  value  of  all 
his  personal  property  within  this  State  was  exceeded  in  amount  by  his 
just  debts  and  liabilities.  He  also  stated  that  he  had  personal 
property  outside  of  this  State,  of  the  value  of  $4,000  over  and  above 
his  debts  and  liabilities.  The  commissioners  thereupon  declined  to 
correct  the  assessment.  They,  however,  requested  the  relator  to  sub- 
mit a  written  statement  of  his  demand,  and  of  the  facts  upon  which  it 
was  based.  In  compliance  with  this  request,  he  presented  an  affida- 
vit showing  that  he  was  a  merchant  having  his  principal  place  of 


380          LISTING  OF  PERSONS  AND  VALUATION, 

business  in  the  city  of  New  Orleans,  and  having  an  office  in  New 
York,  where  he  resided,  only  for  the  purchase  of  goods.  He  reiterated 
his  previous  statement  that  his  personal  property  within  this  State 
did  not  exceed  the  amount  of  his  debts,  and  declared  that  he  had 
no  other  personal  property  except  capital  employed  in  his  business  in 
New  Orleans,  "which  is  taxed  and  taxable  there,  and  farm,  stock,  and 
household  furniture  in  the  State  of  New  Jersey,  which  are  taxable  by 
the  laws  of  the  said  State  of  New  Jersey."  The  commissioners  decided 
that  personal  property  has  no  situs,  but  follows  the  person,  and  "there- 
fore denied  his  application  for  remission,  notwithstanding  that  the 
goods  and  chattels  owned  by  him  are  in  the  city  of  New  Orleans,  and 
without  the  State  of  New  York."  The  assessment  was  adjudged  valid, 
and  affirmed,  at  general  term  in  the  first  district,  and  an  appeal  was 
taken  to  this  court. 

COMSTOCK,  C.  J. — The  legislature  in  defining  property  which  is 
liable  to  taxation,  have  used  the  following  language:  "All  lands 
and  all  personal  estate  within  this  State,  whether  owned  by  individuals 
or  corporations,  shall  be  liable  to  taxation  subject  to  the  exemptions 
hereinafter  specified."  (1  R.  S.,  387,  §  1).  The  title  of  the  act  in 
which  this  provision  is  contained  is,  "of  the  property  liable  to  taxa- 
tion," and  it  is  in  this  title  that  we  ought  to  look  for  controlling 
definitions  on  the  subject.  Other  enactments  relate  to  the  details  of 
the  system  of  taxation,  to  the  mode  of  imposing  and  collecting  the 
public  burdens,  and  not  to  the  property  or  subject  upon  which  it  is 
imposed.  In  order,  therefore,  to  determine  the  question  now  before 
us,  the  primary  requisite  is  to  interpret  justly  and  fairly  the  language 
above  quoted. 

"All  lands  and  all  personal  estate  within  this  State  shall  be  liable  to 
taxation."  If  we  are  willing  to  take  this  language,  without  attempt- 
ing to  obscure  it  by  introducing  a  legal  fiction  as  to  the  situs  of  per- 
sonal estate,  its  meaning  would  seem  to  be  plain.  Lands  and  personal 
property  having  an  actual  situation  within  the  State  are  taxable,  and 
by  a  necessary  implication  no  other  property  can  be  taxed.  I  know 
not  in  what  language'  more  appropriate  or  exact,  the  idea  could  have 
been  expressed.  Real  and  personal  estate  are  included  in  precisely  the 
same  form  of  expression.  Both  are  mentioned  as  being  within  the 
State.  It  is  conceded  that  lands  lying  in  another  State  or  country, 
cannot  be  taxed  against  the  owner  resident  here,  and  no  one  ever 
supposed  the  contrary.  Yet  it  is  claimed  that  goods  and  chattels 
situated  in  Louisiana,  or  in  France,  can  be  so  taxed.  The  legislature, 
I  suppose,  could  make  this  distinction,  but  that  they  have  not  made 
it,  the  language  of  the  statute  is  perfectly  clear.  Nor  is  the  reason 


PEOPLE  EX  REL.  HOYT  V.  COMMISSIONERS.       381 

apparent  why  such  a  distinction  should  be  made.  Lands  have  an 
actual  situs,  which,  of  course,  is  immovable.  Chattels  also  have  an 
actual  situs,  although  they  can  be  moved  from  one  place  to  another. 
Both  are  equally  protected  by  the  laws  of 'the  State  or  sovereignty  in 
which  they  are  situated,  and  both  are  chargeable  there  with  public 
burdens,  according  to  all  just  principles  of  taxation.  A  purely  poll 
tax  has  no  respect  to  property.  We  have  no  such  tax.  With  us  taxa- 
tion is  upon  property,  and  so  it  is  in  all  the  States  of  the  Union.  So 
also  in  general,  it  is  in  all  countries.  The  logical  result  is,  that  the 
tax  is  incurred  within  the  jurisdiction  and  under  the  laws  of  the 
country  where  it  is  situated.  If  we  say  that  taxation  is  on  the  person 
in  respect  to  the  property,  we  are  still  without  a  reason  for  assessing 
the  owner  resident  here,  in  respect  to  one  part  of  his  estate  situated 
elsewhere,  and  not  in  respect  to  another  part.  Both,  I  repeat,  are  the 
subjects  of  taxation  in  the  foreign  jurisdiction.  If  then  the  owner 
ought  to  be  subjected  to  a  double  burden  as  to  one,  why  not  as  to 
the  other  also? 

I  find  then  no  room  for  interpretation,  if  we  take  the  words  of  the 
statute  in  their  plain  ordinary  sense.  The  legislative  definition  of  tax- 
able property,  refers  in  that  sense  to  the  actual  situs  of  personal  not 
less  than  real  estate.  If  the  intention  had  been  different,  it  cannot  be 
doubted  that  different  language  would  have  been  used. 

It  is  said,  however,  that  personal  estate  by  a  fiction  of  law  has  no 
situs  away  from  the  person  or  residence  of  the  owner,  and  is  always 
deemed  to  be  present  with  him  at  the  place  of  his  domicil.  The  right 
to  tax  the  relator's  property  situated  in  New  Orleans  and  New  Jersey, 
rests  upon  the  universal  application  of  this  legal  fiction;  and  it  is 
accordingly  insisted  upon  as  an  absolute  rule  or  principle  of  law 
which,  to  all  intents  and  purposes,  transfers  the  property  from  the 
foreign  to  the  domestic  jurisdiction,  and  thus  subjects  it  to  taxation 
under  our  laws.  Let  us  observe  to  what  results  such  a  theory  will 
lead  us.  The  necessary  consequence  is,  that  goods  and  chattels  actually 
within  this  State  are  not  here  in  any  legal  sense1,  or  for  any  legal 
purpose,  if  the  owner  resides  abroad.  They  cannot  be  taxed  here  be- 
cause they  are  with  the  owner  who  is  a  citizen  or  subject  of  some 
foreign  State.  On  the  same  ground,  if  we  are  to  have  harmonious 
rules  of  law,  we  ought  to  relinquish  the  administration  of  the  effects 
of  a  person  resident  and  dying  abroad,  although  the  claims  of  domestic 
creditors  may  require  such  administration.  So,  in  the  case  of  the 
bankruptcy  of  such  a  person,  we  should  at  once  send  abroad  his  effects, 
and  cannot  consistently  retain  them  to  satisfy  the  claims  of  our  own 


382  LISTING  OF  PERSONS  AND  VALUATION. 

citizens.  Again,  we  ought  not  to  have  laws  for  attaching  the  per- 
sonal estate  of  non-residents,  because  such  laws  necessarily  assume 
that  it  has  a  situs  entirely  distinct  from  the  owner's  domicil.  Yet 
we  do  in  certain  cases,  administer  upon  goods  and  chattels  of  a  foreign 
decedent ;  we  refuse  to  give  up  the  effects  of  a  bankrupt  until  creditors 
here  are  paid;  and  we  have  laws  of  attachment  against  the  effects  of 
non-resident  debtors.  These,  and  other  illustrations  which  might  be 
mentioned,  demonstrate  that  the  fiction  or  maxim  mobilia  personam 
sequuniur  is  by  no  means  of  universal  application.  Like  other  fic- 
tions, it  has  its  special  uses.  It  may  be  resorted  to  when  convenience 
and  justice  so  require.  In  other  circumstances  the  truth  and  not  the 
fiction  affords  as  it  plainly  ought  to  afford,  the  rule  of  action.  The 
proper  use  of  legal  fictions  is  to  prevent  injustice,  according  to  the 
maxim,  in  fictione  juris  semper  aequitas  existat.  "No  fiction,"  says 
Blackstone,  "shall  extend  to  work  an  injury;  its  proper  operation 
being  to  prevent  a  mischief  or  remedy  an  inconvenience,  which  might 
result  from  the  general  rule  of  law."  So,  Judge  Story,  referring  to 
the  situs  of  goods  and  chattels,  observes:  "The  general  doctrine  is 
not  controverted,  that  although  movables  are  for  many  purposes  to 
be  deemed  to  have  no  situs,  except  that  of  the  domicil  of  the  owner, 
yet  this  being  but  a  legal  fiction  it  yields  whenever  it  is  necessary,  for 
the  purpose  of  justice,  that  the  actual  situs  of  the  thing  should  be 
examined."  He  adds,  quite  pertinently,  I  think,  to  the  present  ques- 
tion, "a  nation  within  whose  territory  any  personal  property  is  actually 
situated,  has  an  entire  dominion  over  it  while  therein,  in  point  of 
sovereignty  and  jurisdiction,  as  it  has  over  immovable  property  sit- 
uated there."  (Confl.  of  Laws,  §  550).  I  can  think  of  no  more  just 
and  appropriate  exercise  of  the  sovereignty  of  a  State  or  nation  over 
property,  situated  within  it  and  protected  by  its  laws,  than  to  compel 
it  to  contribute  toward  the  maintenance  of  government  and  law. 

Accordingly  there  seems  to  be  no  place  for  the  fiction  of  which  we 
are  speaking,  in  a  well  adjusted  system  of  taxation.  In  such  a  sys- 
tem a  fundamental  requisite  is  that  it  be  harmonious.  But  harmony 
does  not  exist  unless  the  taxing  power  is  exerted  with  reference  exclu- 
sively either  to  the  situs  of  the  property,  or  to  the  residence  of  the 
owner.  Both  rules  cannot  obtain  unless  we  impute  inconsistency  to 
the  law,  and  oppression  to  the  taxing  power. 

It  seems  to  follow  then  inevitably  that  before  we  can  uphold  the  tax 
which  has  been  imposed  upon  the  relator's  property  situated  in  Now 
Orleans  and  New  Jersey,  we  must  first  determine,  that  if  he  resided 
there,  and  the  same  goods  and  chattels  were  located  here,  they  could 


PEOPLE  EX  EEL.  HOYT  V.  COMMISSIONERS.       383 

not  be  taxed  as  being  within  the  State.  Such  a  determination,  I  am 
satisfied,  would  contravene  the  plain  letter  of  the  statute  as  well  as  all 
sound  principles  underlying  the  subject. 

Let  us  now  take  in,  at  a  single  view,  all  the  legislation  of  the  State 
which  constitutes  the  existing  code  on  this  subject.  We  have,  in  the 
first  place,  the  fundamental  definition  which  is  the  basis  of  all  taxa- 
tion, describing  the  subject  as  "all  real  and  all  personal  estate  within 
this  State."  The  same  revisers  and  the  same  legislators  who  thus 
defined  the  basis,  prescribed  the  mode  of  assessment.  Every  owner  of 
personal  estate  was  to  be  assessed  in  the  town  or  ward  where  he  re- 
sided, but  this  alone  would  not  embrace  the  case  of  a  non-resident, 
whose  property  was  within  the  State.  But  there  is  no  such  thing  as 
a  vacant  possession  of  personal  estate.  Therefore  the  term  owner  was 
made  to  include  trustees,  guardians,  &c.,  and  they  were  to  be  assessed 
for  property  in  their  possession  or  under  their  control,  whoever  and 
wherever  the  beneficial  owner  might  be.  In  that  mode,  the  estates 
of  non-residents  having  a  situs  here  were  reached.  But  it  was  at  least 
doubtful  whether  the  terms  trustees,  guardians,  &c.,  were  sufficiently 
descriptive  to  include  property  of  non-residents  situated  here,  under 
all  conditions  which  ought  to  subject  it  to  taxation.  The  more  com- 
prehensive word  "agent*'  therefore,  was  added  in  1851;  but  in  order 
that  this  word  might  not  carry  the  principle  to  results  unjust  and 
inexpedient,  the  legislature  with  becoming  caution  made  at  the  same 
time  a  special  exception  in  favor  of  property  and  money  sent  here 
from  other  States  for  sale  or  investment.  The  very  language  of  the 
exception  was  an  unmistakable  assertion  of  the  principle.  Then  in 
1855,  a  serious  defect  in  the  system  had  been  developed.  Non-resi- 
dents of  the  State  were  found  to  be  personally,  either  as  principals  or 
partners,  in  the  possession  and  management  of  large  capitals  or  estates 
within  the  State.  They  could  not  be  assessed,  as  the  laws  were,  and 
there  was  no  agent  or  trustee  to  assess  in  respect  to  property  thus  sit- 
uated. The  system  was  accordingly  improved  and  extended  so  as  to 
embrace  such  cases. 

Thus  we  have  a  system  apparently  symmetrical  and  complete,  ac- 
cording to  which  all  personal  estate  having  an  actual  situs  in  this 
State  is  brought  within  the  sphere  of  taxation  without  regard  to  the 
domicil  of  the  owner,  with  only  special  exceptions  dictated  by  policy 
and  justice.  And  if  this  be  the  rule  of  taxation  where  the  situs  of 
the  thing  to  be  taxed,  and  the  domicil  of  the  owner  are  different,  it 
is  conceded  that  the  opposite  rule  cannot  and  does  not  prevail.  Pro- 
ceeding on  this  rule,  Louisiana  and  New  Jersey  very  justly  imposed 


384          LISTING  OF  PERSONS  AND  VALUATION. 

a  share  of  their  public  burdens  on  the  property  of  the  relator  situated 
in  those  States.  The  State  of  New  York  will  do  the  same  thing  in 
respect  to  the  citizens  of  those  States  having  property  here,  but  it  is 
not  so  unjust  to  its  own  citizens  as  to  load  them  with  double  burdens 
by  proceeding  on  the  opposite  principle  also.  I  am  confident  there 
is  nothing  in  all  our  legislation  which  affords  any  ground  for  imput- 
ing to  it  such  inconsistency  and  injustice 

I  conclude  the  discussion  of  this  question  by  a  brief  reference  to 
the  course  of  decision  in  other  courts  of  this  country.  In  the 
case  of  The  City  of  New  Albany  v.  Meekin,  (3  Ind.  E.  481),  the 
charter  of  the  town  conferred  the  right  of  taxing  all  real  and  all  per- 
sonal estate  within  the  city.  The  defendant  was  a  resident  of  the  city, 
and  was  assessed  in  respect  to  a  steamboat  enrolled  at  Louisville,  and 
which  touched  only  occasionally  at  New  Albany.  The  action  was  debt, 
to  recover  the  amount  of  the  assessment.  But  it  was  held  that  the  tax 
was  illegal,  and  that  no  recovery  could  be  had.  The  Supreme  Court 
observed,  "the  only  question  we  have  to  consider  is,  whether  the  boat, 
or  the  defendant's  share,  is  within  the  city."  The  same  point  arose 
upon  a  grant  of  the  right  of  taxation,  in  the  same  words,  in  the  case 
of  Wilkey  v.  The  City  of  PeTcin  (19  111.  E.,  160),  and  the  question 
was  determined  in  the  same  way.  The  court  said :  "as  a  general  rule 
personal  property  follows  the  person  of  the  owner,  but  municipal 
corporations  have  no  power  to  protect  property  not  within  their  corpo- 
rate limits,  nor  can  they  render  any  equivalent  for  the  right  of  tax- 
ing such  property,  and  there  is  no  propriety  in  the  application  of  this 
rule  to  them  for  the  purposes  of  revenue."  "It  is  evident,"  the  court 
added,  "that  the  legislature  intended  to  confine  the  power  of  taxation 
to  property  actually  within  the  territorial  jurisdiction."  In  Johnson 
v.  The  City  of  Lexington,  (14  B.  Munroe,  648),  the  city  government 
under  its  charter  had  authority  to  make  a  list  of  its  taxable  inhabit- 
ants, and  to  assess  against  them  their  real  estate  within  the  city,  and 
also  the  just  and  true  value  of  such  personal  estate  as  the  Mayor, 
&c.  should  designate.  The  Court  of  Appeals  of  Kentucky  held  that 
this  power  extended  only  to  personal  estate  within  the  city,  and  that 
the  property  referred  to  was  such  as  had  an  actual  situs,  and  not 
merely  such  as  had  a  legal  or  constructive  status  within  the  city,  and 
which,  they  observed,  is  regarded  only  "for  some  purposes  as  being 
with  its  owner  where  he  is  domiciled."  In  Finley  v.  The  City  of 
Philadelphia,  (32  Penn.  381),  the  plaintiff  was  a  surgeon  in  the  United 
States  army,  stationed  and  keeping  house  in  that  city,  but  without 
any  domiciliary  intention.  He  was  assessed  in  respect  to  his  house- 
hold furniture,  and  claimed  to  be  exempt  in  consequence  of  his  non- 


PEOPLE  EX  REL.  HOYT  V.  COMMISSIONERS.       385 

residence  and  occupation.  But  the  Supreme  Court  decided  other- 
wise; Chief  Justice  LOWRIE  observing:  "there  is  nothing  poetical 
about  tax  laws.  Wherever  they  find  property,  they  claim  a  contri- 
bution for  its  protection  without  any  special  respect  to  the  owner  or 
his  occupation."  In  Catlin  v.  Hull  (21  Verm.  152),  a  person  resid- 
ing in  New  York  owned  personal  estate,  consisting  of  notes  and  other 
obligations  of  debtors  who  were  residents  of  the  State  of  Vermont. 
These  he  had  deposited  with  the  plaintiff,  residing  in  the  town  of 
Orwell  in  that  State,  as  his  agent,  for  management,  collection  and 
investment,  and  the  plaintiff  being  such  agent  was  assessed  in  that 
capacity  for  the  estate  thus  in  his  hands.  His  own  property  being 
seized  on  the  warrant  for  the  collection  of  the  tax,  he  brought  tres- 
pass for  such  seizure,  and  the  only  question  was,  whether  the  prop- 
erty of  the  non-resident  owner  was  subject  to  taxation  in  that  town. 
The  statute  of  that  State,  very  much  like  ours,  provided  that  per- 
sonal estate  held  in  trust  by  an  executor,  administrator,  agent  or 
trustee,  should  be  assessed  to  such  executor.  &c.  Among  the  propo- 
sitions argued  on  behalf  of  the  plaintiff  it  was  insisted  that  per- 
sonal estate,  and  especially  debts  due,  having  no  fixed  situs,  follow 
the  person  and  are  to  be  considered  as  situate  where  his  domicil 
is,  and  hence  that  the  property  in  question  could  not  be  taxed,  be- 
cause the  owner  was  domiciled  out  of  the  State.  If  such  was  the 
intention  of  the  legislature,  it  was  denied  that  they  had  the  power 
of  taxation  in  such  a  case.  The  argument  was  carefully  considered, 
and  was  rejected  by  the  Supreme  Court  of  that  State.  After  referring 
to  and  recognizing  the  fiction  insisted  on,  it  was  observed  by  the 
"court:  "But  this  rule  is  merely  a  legal  fiction,  adopted  from  con- 
siderations of  general  convenience  and  policy  for  the  benefit  of  com- 
merce, and  to  enable  persons  to  dispose  of  property  at  their  decease, 
agreeably  to  their  wishes,  without  being  embarrassed  by  their  want  of 
knowledge  in  relation  to  the  laws  of  the  country  where  the  same  is 
situated.  "But  this  doctrine,"  it  was  added,  "in  relation  to  the  situs 
of  personal  chattels,  and  their  transfer  and  distribution,  we  do  not 
consider  as  at  all  conflicting  with  the  actual  jurisdiction  of  the  State 
where  it  is  situate,  over  it,  or  with  the  right  to  subject  it,  in  com- 
mon with  the  other  property  of  the  State,  to  share  in  the  burden  of 
government  by  taxation."  And  it  was  further  observed,  "we  are  not 
only  satisfied  that  this  method  of  taxation  is  well  founded  in  prin- 
ciple and  upon  authority,  but  we  think  it  entirely  just  and  equitable, 
that  if  persons  residing  abroad  bring  their  property  and  invest  it  in 
this  State  for  the  purpose  of  deriving  profit  from  its  use  and  employ- 
ment here,  and  thus  avail  themselves  of  the  benefit  and  advantages  of 
25 


386          LISTING  OF  PERSONS  AND  VALUATION. 

our  laws  for  the  protection  of  their  property,  their  property  should 
vield  its  due  proportion  towards  the  support  of  the  government  which 
thus  protects  it." 

The  cases  which  I  have  referred  to  were  determined  by  the  highest 
courts  in  five  States  of  the  Union.  They  appear  to  be  entirely  per- 
tinent to  the  question  now  before  us,  and  I  am  not  aware  of  a  single 
decision  to  the  contrary,  except  the  one  under  review.  These  cases  not 
only  establish  a  construction  of  statutes  framed  like  our  own,  but 
they  all  assert  the  principles  of  taxation,  which  lie  at  the  very  founda- 
tion of  the  subject.  (See  also  Story's  Confl.  of  Laws,  pp.  19,  462). 
My  conclusion,  therefore,  derived  from  the  statutes,  from  these  au- 
thorities and  from  the  reasons  of  a  general  nature  which  ought  to 
influence  the  decision  of  such  a  question,  is  that  the  relator  was  not 
subject  to  taxation  for  his  personal  estate,  having  an  actual  situa- 
tion in  New  Jersey  and  Louisiana.  This  conclusion  is  intended  to 
embrace  only  property  which  is  visible  and  tangible,  so  as  to  be 
capable  of  a  situs  away  from  the  owner  or  his  domicil ;  and  I  do  not 
consider  the  question  in  reference  to  personal  estate  of  a  different 
description.  It  must  be  within  the  State  in  order  to  be  subject  to 
taxation,  for  so  is  the  statute;  but  that  may  be  true  of  choses  in 
action,  and  obligations  for  the  payment  of  money  due  to  a  creditor 
resident  here,  from  a  debtor  whose  domicil  is  in  another  State.  If  the 
securities  are  separated  from  the  person  and  domicil  of  the  owner, 
and  are  actually  in  the  hands  of  an  agent  in  another  State  for  col- 
lection, investment  and  reinvestment  there,  it  may  be  that  capital 
thus  situated  should  be  regarded  as  foreign  and  not  domestic,  in  the 
absence  of  any  special  statutory  provision  intended  for  such  a  case. 
Questions  of  this  character  need  not  now  be  determined.  It  may  be 
proper  to  add  in  respect  to  chattels  which  are  in  transit  through  the 
State,  that  they  ought  not  to  be  considered  as  having  a  situs  here, 
so  as  to  be  subject  to  taxation.  On  the  other  hand,  I  have  no  doubt 
that  ships  at  sea,  registered  at  a  port  within  this  State  and  conse- 
quently having  no  situs  elsewhere,  are  justly  taxable  to  the  resident 
owner. 

The  judgment  of  the  Supreme  Court  should  be  reversed,  and  judg- 
ment must  be  rendered  that  the  assessment  roll  be  corrected  by  strik- 
ing therefrom  the  assessment  against  the  relator. 

SELDEN,  LOT,  JAMES  and  DA  VIES,  Js.,  concurring. 

Ordered  accordingly. 

Cases  in  this  collection  relative  to  the  situs  of  land  for  the  purposes  of 
taxation  are:  Matter  of  Swift,  137  N.  Y.  77;  Miller  v.  Pennsylvania,  111  Pa. 
St.  321 ;  Estate  of  Handley,  181  Pa.  St.  339  supra. 


PEOPLE  EX  EEL.  JEFFERSOX  V.  SMITH.     387 


PEOPLE  EX  EEL  JEFFERSON  V.  SMITH  ET  AL. 
ASSESSORS,  &C. 

Court  of  Appeals  of  New  York.   April,  1882. 
88  New  York,  576. 

EARL,  J.  The  appellants,  as  assessors  of  the  village  of  Warsaw, 
in  1880,  assessed  the  relator  for  $250,000  personal  property.  The 
property  so  assessed  consisted  of  mortgage  securities  taken  by  agents 
of  the  relator,  residents  in  the  States  of  Illinois,  Minnesota  and  Wis- 
consin, who  retained  the  custody  of  the  securities  so  taken  which 
were  never  brought  within  the  territorial  limits  of  the  State  of  Xew 
York,  and  which  were,  at  all  times  after  they  were  taken,  in  the  pos- 
session and  under  the  control  of  such  non-resident  agents.  All  in- 
terest payable  on  such  securities  was  paid  directly  to  the  agents,  and, 
with  the  exception  of  small  sums  remitted  to  the  relator  for  family 
expenses  and  used  as  such,  and  money  remitted  to  and  used  by  him 
to  pay  his  debts,  such  interest  was  invested  by  the  agents  in  like  man- 
ner with  the  principal,  and  the  securities  taken  therefor  were  held  in 
like  manner  as  the  original  securities.  When  the  principal  of  the 
securities  became  due  and  was  paid,  it  was  paid  to  the  agents  and  by 
them  reinvested  in  like  manner  as  the  original  investments,  and  such 
new  securities  were  held  by  the  agents  in  like  manner  as  the  original 
securities.  The  agents  had  power  to  discharge  the  securities  on  pay- 
ment of  the  same,  and  did  so  discharge  them,  and  they  had  power 
to  accept  applications  for  loans,  and  make  loans  without  submitting 
the  same  to  the  relator  for  approval.  The  funds  so  kept  for  invest- 
ment, until  the  same  were  invested  were  kept  in  the  names  of  the 
agents.  By  the  laws  of  the  States  where  such  securities  were  so 
taken  and  held,  they  were  subject  to  taxation  under  the  laws  of  such 
States  in  the  hands  of  the  agents.  The  agents  had  advertised  offices 
and  places  of  business  where  the  business  of  the  relator  in  making 
such  loans  was  carried  on  and  the  securities  were  held. 

After  the  imposition  of  the  assessment  complained  of,  the  relator 
applied  to  the  appellants  as  such  assessors  to  correct  the  assessment- 
roll  by  striking  the  assessment  therefrom,  and  the  application  was 
denied.  Whereupon  the  relator,  under  chapter  269  of  the  Laws  of 
1880,  sued  out  a  writ  of  certiorari  to  which  the  appellants  made 
return,  and  upon  the  hearing  at  the  Special  Term  judgment  was 
rendered  striking  the  assessment  from  the  assessment-roll.  The  assess- 
ors appealed  from  the  judgment  to  the  General  Term,  and  from 
affirmance  there  to  this  court. 


388          LISTING  OF  PERSONS  AND  VALUATION. 

The  question  for  our  determination  is  whether  the  securities  so 
taken  and  held  for  the  relator  were  subject  to  taxation  in  this  State 
while  in  the  hands  of  his  non-resident  agents.  The  solution  of  this 
question  depends  upon  the  construction  to  be  given  to  the  following 
section  of  the  Revised  Statutes:  "All  lands  and  all  personal  estate 
within  this  State,  whether  owned  by  individuals  or  by  corporations, 
shall  be  liable  to  taxation  subject  to  the  exemptions  hereinafter  speci- 
fied." (2  R.  S.  (7th  ed.)  981). 

Before  the  personal  estate  can  be  taxed  in  this  State  under  the 
statute  it  must  be  within  the  State.  There  is  no  more  authority  for 
taxing  personal  property  not  within  the  State  than  there  is  for  tax- 
ing lands  not  within  the  State.  The  claim,  however,  of  the  learned 
counsel  for  the  assessors  is  that  these  securities  or  the  debts  secured  by 
them  were  choses  in  action  which  could  not  be  separated  or  have  an 
actual  situs  away  from  the  owner,  and  that  they  must  be  treated  as 
existing  and  present  at  the  domicile  of  the  owner  and  hence  that  they 
are  taxable  at  the  place  of  such  domicile. 

It  is  undoubtedly  a  general  rule  of  law  that  movable  property  is 
deemed  to  have  no  situs  except  that  of  the  domicile  of  the  owner, 
yet,  this  being  but  a  legal  fiction,  it  yields  whenever  it  is  necessary 
for  the  purpose  of  justice  that  the  actual  situs  of  the  thing  should  be 
examined,  and  whenever  the  legislative  intent  is  manifested  that  this 
legal  fiction  should  not  operate.  The  fiction  frequently  applies  as 
well  to  the  case  of  tangible  personal  property,  such  as  merchandise, 
as  to  the  case  of  choses  in  action.  But  it  was  directly  held  in  the 
case  of  Hoyi  v.  The  Commissioners  of  Taxes  (23  N.  Y.  224),  that 
tangible  personal  property,  having  a  situs  outside  of  this  State  could 
not,  under  our  statutes,  be  treated  as  existing  at  the  domicile  of  the 
owner  in  this  State  for  the  purpose  of  taxation  here;  and  it  only  re- 
mains to  be  determined  now,  whether  securities  situated  like  those 
here  in  question,  are  to  be  treated  by  operation  of  the  fiction  referred 
to  as  within  this  State.  I  am  of  opinion  that  it  is  sufficiently  clear 
that  it  was  the  legislative  intent  that  they  should  not  be  so  treated. 

That  choses  in  action  can  have  a  situs  away  from  the  domicile  of  the 
owner  for  the  purpose  of  taxation  and  for  other  purposes,  is  fre- 
quently manifested  in  the  statutes  of  this  State. 

I  think  it  may  safely  be  said  that  the  legal  fiction  that  choses  in 
action  always  attend  the  owner  and  have  a  legal  existence  only  at 
the  place  of  his  domicile  has  been  frequently  ignored  by  the  legisla- 
ture in  framing  our  system  of  taxation,  and  that  it  cannot  be  jesorted 
to  as  a  safe  guide  in  the  construction  of  the  provision  of  the  statute 


PULLMAN  PALACE  CAR  CO.  V.  PENNSYLVANIA.   389 

now  under  consideration.  The  statute  providing  for  the  taxation  of 
"personal  estate  within  this  State"  was  not  intended  to  subject  to 
taxation,  personal  securities  actually  in  another  State,  held,  managed 
and  controlled  there,  under  the  protection  of  the  laws  of  that  State, 
and  subject  to  taxation  there,  in  the  hands  of  agents.  It  cannot 
be  supposed  that  the  legislature  intended  that  our  citizens  should  be 
subject  to  taxation  here  and  in  other  States  also  upon  the  same  prop- 
erty, or  that  it  would  tax  in  the  hands  of  agents  here  securities  be- 
longing to  non-resident  owners,  while  it  denied  the  right  of  other 
States  to  tax  the  securities  of  our  citizens  in  the  hands  of  agents  there. 

It  is  clear  from  the  statutes  ....  and  the  authorities  cited 
and  from  the  understanding  of  business  men  in  commercial  transac- 
tions, as  well  as  of  jurists  and  legislators,  that  mortgages,  bonds,  bills 
and  notes  have  for  many  purposes  come  to  be  regarded  as  property 
and  not  as  the  mere  evidence  of  debts,  and  that  they  may  thus  have 
a  situs  at  the  place  where  they  are  found,  like  other  visible,  tangible 
chattels. 

Without  extending  this  discussion  further,  we  are  therefore  of 
opinion  that  the  judgment  should  be  affirmed. 

All  concur.  Judgment  affirmed. 


PULLMAN'S  PALACE  CAR  CO.  V.  PENNSYLVANIA. 

Supreme  Court  of  the  United  States.    October,  1890. 
141  United  States,  18. 

Mr.  Justice  GRAY,  after  stating  the  case  ....  delivered  the 
opinion  of  the  court. 

Upon  this  writ  of  error,  whether  this  tax  was  in  accordance  with 
the  law  of  Pennsylvania  is  a  question  on  which  the  decision  of  the 
highest  court  of  the  State  is  conclusive.  The  only  question  of  which 
this  court  has  jurisdiction  is  whether  the  tax  was  in  violation  of  the 
clause  of  the  Constitution  of  the  United  States  granting  to  Congress 
the  power  to  regulate  commerce  among  the  several  States.  The  plain- 
tiff in  error  contends  that  its  cars  could  be  taxed  only  in  the  State 
of  Illinois,  in  which  it  was  incorporated  and  had  its  principal  place 
of  business. 

No  general  principles  of  law  are  better  settled,  or  more  funda- 
mental, than  that  the  legislative  power  of  every  State  extends  to  all 
property  within  its  borders,  and  that  only  so  far  as  the  comity  of  that 


390          LISTING  OF  PERSONS  AND  VALUATION. 

State  allows  can  such  property  be  affected  by  the  law  of  any  other 
State.  The  old  rule,  expressed  in  the  maxim  mobilia  sequuntur 
personam,  by  which  personal  property  was  regarded  as  subject  to  the 
law  of  the  owner's  domicil,  grew  up  in  the  Middle  Ages,  when  movable 
property  consisted  chiefly  of  gold  and  jewels,  which  could  be  easily 
carried  by  the  owner  from  place  to  place,  or  secreted  in  spots  known 
only  to  himself.  In  modern  times,  since  the  great  increase  in  amount 
and  variety  of  personal  property,  not  immediately  connected  with  the 
person  of  the  owner,  that  rule  has  yielded  more  and  more  to  the  lex 
situs,  the  law  of  the  place  wher,e  the  property  is  kept  and  used. 
Green  v.  Van  BusTcirTc,  5  Wall.  307,  and  7  Wall.  139 ;  Hervey  v.  Rhode 
Island  Locomotive  Works,  93  U.  S.  664;  Harkness  v.  Russell,  118 
U.  S.  663,  679;  Walworth  v.  Harris,  129  U.  S.  355;  Story  on  Conflict 
of  Laws,  §  550;  Wharton  on  Conflict  of  Laws,  §§  297-311. 

For  the  purposes  of  taxation,  as  has  been  repeatedly  affirmed  by  this 
court,  personal  property  may  be  separated  from  its  owner;  and  he 
may  be  taxed,  on  its  account,  at  the  place  where  it  is,  although  not 
the  place  of  his  own  domicil,  and  even  if  he  is  not  a  citizen  or  a  resi- 
dent of  the  State  which  imposes  the  tax.  Lane  County  v.  Oregon, 
7  Wall.  71,  77;  Railroad  Co.  v.  Pennsylvania,  15  Wall.  300,  323,  324, 
328;  Railroad  Co.  v.  Peniston,  18  Wall.  5,  29;  Tappan  v.  Merchants' 
Bank,  19  Wall.  490,  499;  State  Railroad  Tax  Cases,  92  U.  S.  575, 
607,  608;  Brown  v.  Houston,  114  U.  S.  622;  Coe  v.  Errol,  116  U.  S. 
517,  524;  Marye  v.  Baltimore  &  Ohio  Railroad,  127  U.  S.  117,  123. 

It  is  equally  well  settled  that  there  is  nothing  in  the  Constitution 
or  laws  of  the  United  States  which  prevents  a  State  from  taxing  per- 
sonal property,  employed  in  interstate  or  foreign  commerce,  like  other 
personal  property  within  its  jurisdiction.  Delaware  Railroad  Tax,  18 
Wall.  206,  232;  Telegraph  Co.  v.  Texas,  105  U.  S.  460,  464;  Glou- 
cester Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196,  206,  211;  Western 
Union  Telegraph  Co.  v.  Attorney  General  of  Massachusetts,  125  U. 
S.  530,  549;  Marye  v.  Baltimore  &  Ohio  Railroad,  127  U.  S.  117, 
124;  Leloup  v.  Mobile,  127  U.  S.  640,  649. 

The  tax  now  in  question  is  not  a  license  tax  or  a  privilege  tax;  it 
is  not  a  tax  on  business  or  occupation ;  it  is  not  a  tax  on,  or  because  of, 
the  transportation,  or  the  right  of  transit,  of  persons  or  property 
through  the  State  to  other  States  or  countries.  The  tax  is  imposed 
equally  on  corporations  doing  business  within  the  State,  whether 
domestic  or  foreign,  and  whether  engaged  in  interstate  commerce  or 
not.  The  tax  on  the  capital  of  the  corporation,  on  account  of  its 


PULLMAN  PALACE  CAB  CO.  V.  PENNSYLVANIA. 

property  within  the  State  is,  in  substance  and  effect,  a  tax  on  that 
property.  Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196,  209 ; 
Western  Union  Telegraph  Co.  v.  Attorney  General  of  Massachusetts, 
125  U.  S.  530,  552.  This  is  not  only  admitted,  but  insisted  on,  by 
the  plaintiff  in  error. 

The  cars  of  this  company  within  the  State  of  Pennsylvania  are 
employed  in  interstate  commerce;  but  their  being  so  employed  does 
not  exempt  them  from  taxation  by  the  State;  and  the  State  has  not 
taxed  them  because  of  their  being  so  employed,  but  because  of  their 
being  within  its  territory  and  jurisdiction.  The  cars  were  continu- 
ously and  permanently  employed  in  going  to  and  fro  upon  certain 
routes  of  travel.  If  they  had  never  passed  beyond  the  limits  of 
Pennsylvania,  it  could  not  be  doubted  that  the  State  could  tax  them, 
like  other  property,  within  its  borders,  notwithstanding  they  were 
employed  in  interstate  commerce.  The  fact  that,  instead  of  stopping 
at  the  state  boundary,  they  cross  that  boundary  in  going  out  and 
coming  back,  cannot  affect  the  power  of  the  State  to  levy  a  tax  upon 
them.  The  State,  having  the  right,  for  the  purpose  of  taxation,  to 
tax  any  personal  property  found  within  its  jurisdiction,  without  re- 
gard to  the  place  of  the  owner's  domicil,  could  tax  the  specific  cars 
which  at  a  given  moment  were  within  its  borders.  The  route  over 
which  the  cars  travel  extending  beyond  the  limits  of  the  State,  par- 
ticular cars  may  not  remain  in  the  State;  but  the  company  has  at 
all  times  substantially  the  same  number  of  cars  within  the  State,  and 
continuously  and  constantly  uses  there  a  portion  of  its  property;  and 
it  is  distinctly  found,  as  matter  of  fact,  that  the  company  con- 
tinuously, throughout  the  periods  for  which  these  taxes  were  levied, 
carried  on  business  in  Pennsylvania,  and  had  about  one  hundred  cars 
within  the  State. 

The  mode  which  the  State  of  Pennsylvania  adopted,  to  ascertain 
the  proportion  of  the  company's  property  upon  which  it  should  be 
taxed  in  that  State,  was  by  taking  as  a  basis  of  assessment  such  pro- 
portion of  the  capital  stock  of  the  company  as  the  number  of  miles 
over  which  it  ran  cars  within  the  State  bore  to  the  whole  number  of 
miles,  in  that  and  other  States,  over  which  its  cars  were  run.  This 
was  a  just  and  equitable  method  of  assessment ;  and,  if  it  were  adopted 
by  all  the  States  through  which  these  cars  ran,  the  company  would 
be  assessed  upon  the  whole  value  of  its  capital  stock,  and  no  more. 

The  validity  of  this  mode  of  apportioning  such  a  tax  is  sustained 
by  several  decisions  of  this  court,  in  cases  which  came  up  from  the 
Circuit  Courts  of  the  United  States,  and  in  which,  therefore,  the 
jurisdiction  of  this  court  extended  to  the  determination  of  the  whole 


392          LISTING  OF  PEKSONS  AND  VALUATION. 

case,  and  was  not  limited,  as  upon  writs  of  error  to  the  state  courts, 
to  questions  under  the  Constitution  and  laws  of  the  United  States. 

In  the  State  Railroad  Tax  Cases,  92  U.  S.  575,  it  was  adjudged 
that  a  statute  of  Illinois,  by  which  a  tax  on  the  entire  taxable  prop- 
erty of  a  railroad  corporation,  including  its  rolling  stock,  capital 
and  franchise,  was  assessed  by  the  state  board  of  equalization,  and  was 
collected  in  each  municiplity  in  proportion  to  the  length  of  the  road 
within  it,  was  lawful,  and  not  in  conflict  with  the  Constitution  of  the 
State;  and  Mr.  Justice  Miller  delivering  judgment  said: 

"Another  objection  to  the  system  of  taxation  by  the  State  is,  that 
the  rolling  stock,  capital  stock  and  franchise  are  personal  property, 
and  that  this,  with  all  other  personal  property,  has  a  local  situs  at 
the  principal  place  of  business  of  the  corporation,  and  can  be  taxed 
by  no  other  county,  city,  or  town,  but  the  one  where  it  is  so  situated. 
This  objection  is  based  upon  the  general  rule  of  law  that  personal 
property,  as  to  its  situs,  follows  the  domicil  of  its  owner.  It  may 
be  doubted  very  reasonably  whether  such  a  rule  can  be  applied  to 
a  railroad  corporation  as  between  the  different  localities  embraced 
by  its  line  of  road.  But,  after  all,  the  rule  is  merely  the  law  of  the 
State  which  recognizes  it;  and  when  it  is  called  into  operation  as  to 
property  located  in  one  State,  and  owned  by  a  resident  of  another, 
it  is  a  rule  of  comity  in  the  former  State  rather  than  an  absolute 
principle  in  all  cases.  Green  v.  Van  Buskirk,  5  Wall.  312.  Like  all 
other  laws  of  a  State,  it  is,  therefore,  subject  to  legislative  repeal, 
modification  or  limitation;  and  when  the  legislature  of  Illinois  de- 
clared that  it  should  not  prevail  in  assessing  personal  property  of  rail- 
road companies  for  taxation,  it  simply  exercised  an  ordinary  function 
of  legislation."  92  U.  S.  607,  608. 

"It  is  further  objected  that  the  railroad  track,  capital  stock  and 
franchise  is  not  assessed  in  each  county  where  it  lies,  according  to 
its  value  there,  but  according  to  an  aggregate  value  of  the  whole,  on 
which  each  county,  city  and  town  collects  taxes  according  to  the 
length  of  the  track  within  its  limits."  "It  may  well  be  doubted 
whether  any  better  mode  of  determining  the  value  of  that  portion 
of  the  track  within  any  one  county  has  been  devised,  than  to  ascer- 
tain the  value  of  the  whole  road,  and  apportion  the  value  within 
the  county  by  its  relative  length  to  the  whole."  "This  court  has 
expressly  held  in  two  cases,  where  the  road  of  a  corporation  ran 
through  different  States,  that  a  tax  upon  the  income  or  franchise  of 
the  road  was  properly  apportioned  by  taking  the  whole  income .  or 
value  of  the  franchise,  and  the  length  of  the  road  within  each  State,  as 


PULLMAN  PALACE  CAR  CO.  V.  PENNSYLVANIA.   393 

the  basis  of  taxation.     Delaware  Railroad  Tax,  18  Wall.  206;  Erie 
Railroad  v.  Pennsylvania,  21  Wall.  492."    92  U.  S.  608,  611. 

So  in  Western  Union  Telegraph  Co.  v.  Attorney  General  of  Massa- 
chusetts, 125  U.  S.  530,  this  court  upheld  the  validity  of  a  tax  im- 
posed by  the  State  of  Massachusetts  upon  the  capital  stock  of  a 
telegraph  company,  on  account  of  property  owned  and  used  by  it 
within  the  State,  taking  as  the  basis  of  assessment  such  proportion  of 
the  value  of  its  capital  stock  as  the  length  of  its  lines  within  the 
State  bore  to  their  entire  length  throughout  the  country. 

Even  more  in  point  is  the  case  of  Marye  v.  Baltimore  &  Ohio  Rail- 
road, 127  U.  S.  117,  in  which  the  question  was  whether  a  railroad  com- 
pany incorporated  by  the  State  of  Maryland,  and  no  part  of  whose 
own  railroad  was  within  the  state  of  Virginia,  was  taxable  under  the 
general  laws  of  Virginia  upon  rolling  stock  owned  by  the  company, 
and  employed  upon  connecting  railroads  leased  by  it  in  that  State, 
yet  not  assigned  permanently  to  those  roads,  but  used  inter- 
changeably upon  them  and  upon  other  roads  in  other  States,  as  the 
company's  necessities  required.  It  was  held  not  to  be  so  taxable, 
solely  because  the  tax  laws  of  Virginia  appeared  upon  their  face  to 
be  limited  to  railroad  corporations  of  that  State;  and  Mr.  Justice 
Matthews  delivering  the  unanimous  judgment  of  the  court,  said : 

"It  is  not  denied,  as  it  cannot  be,  that  the  State  of  Virginia  has 
rightful  power  to  levy  and  collect  a  tax  upon  such  property  used  and 
found  within  its  territorial  limits,  as  this  property  was  used  and 
found,  if,  and  whenever  it  may  choose,  by  apt  legislation,  to  exert 
its  authority  over  the  subject.  It  is  quite  true,  as  the  situs  of  the 
Baltimore  and  Ohio  Railroad  Company  is  in  the  State  of  Maryland, 
that  also,  upon  general  principles,  is  the  situs  of  all  its  personal  prop- 
erty ;  but  for  purposes  of  taxation,  as  well  as  for  other  purposes,  that 
situs  may  be  fixed  in  whatever  locality  the  property  may  be  brought 
and  used  by  its  owner  by  the  law  of  the  place  where  it  is  found. 
If  the  Baltimore  and  Ohio  Railroad  Company  is  permitted  by  the 
State  of  Virginia  to  bring  into  its  territory,  and  there  habitually 
to  use  and  employ  a  portion  of  its  movable  personal  property,  and 
the  railroad  company  chooses  so  to  do,  it  would  certainly  be  com- 
petent and  legitimate  for  the  State  to  impose  upon  such  property,  thus 
used  and  employed,  its  fair  share  of  the  burdens  of  taxation  imposed 
upon  similar  property  used  in  the  like  way  by  its  own  citizens.  And 
such  a  tax  might  be  properly  assessed  and  collected  in  cases  like  the 
present,  where  the  specific  and  individuals  items  of  property  so  used 
and  employed  were  not  continuously  the  same,  but  were  constantly 
changing,  according  to  the  exigencies  of  the  business.  In  such  cases, 


394          LISTING  OF  PERSONS  AND  VALUATION. 

the  tax  might  be  fixed  by  an  appraisement  and  valuation  of  the  average 
amount  of  the  property  thus  habitually  used,  and  collected  by  dis- 
traint upon  any  portion  that  might  at  any  time  be  found.  Of  course, 
the  lawlessness  of  a  tax  upon  vehicles  of  transportation  used  by  com- 
mon carriers  might  have  to  be  considered  in  particular  instances  with 
reference  to  its  operation  as  a  regulation  of  commerce  among  the 
States,  but  the  fact  that  they  were  employed  as  'vehicles  of  trans- 
portation in  the  interchange  of  interstate  commerce  would  not  render 
their  taxation  invalid."  127  U.  S.  123,  124. 

For  these  reasons,  and  upon  these  authorities,  the  court  is  of 
opinion  that  the  tax  in  question  is  constitutional  and  valid.  The 
result  of  holding  otherwise  would  be  that,  if  all  the  States  should 
concur  in  abandoning  the  legal  fiction  that  personal  property  has  its 
situs  at  the  owner's  domicil,  and  in  adopting  the  system  of  taxing  it 
at  the  place  at  which  it  is  used  and  by  whose  laws  it  is  protected, 
property  employed  in  any  business  requiring  continuous  and  constant 
movement  from  one  State  to  another  would  escape  taxation  altogether. 

Judgment  affirmed. 

Mr.  Justice  BRADLEY,  with  whom  concurred  Mr.  Justice  FIELD 
and  Mr.  Justice  HABLAN,  dissenting. 


ADAMS  EXPRESS  CO.  V.  OHIO  STATE  AUDITOR. 

i       Supreme  Court  of  the  United  States. 
165  United  States,  194- 

These  are  cases  involving  the  constitutionality  of  certain  laws  of 
the  State  of  Ohio  providing  for  the  taxation  of  telegraph,  telephone 
and  express  companies,  and  the  validity  of  assessments  of  express 
companies  thereunder. 

The  law  created  a  State  board  of  appraisers  and  assessors,  consist- 
ing of  the  auditor  of  State,  treasurer  of  State  and  attorney  general, 
which  was  charged  with  the  duty  of  assessing  the  property  in  Ohio  of 
telegraph,  telephone  and  express  companies.  By  the  act  as  amended, 
between  the  first  and  thirty-fist  days  of  May  annually  each  telegraph, 
telephone  and  express  company,  doing  business  in  Ohio,  was  required 
to  file  a  return  with  the  auditor  of  State,  setting  forth  among  other 
things  the  number  of  shares  of  its  capital  stock;  the  par  value  and 
market  value  (or,  if  there  be  no  market  value,  then  the  actual  value) 


ADAMS  EX.  CO.  V.  OHIO  STATE  AUDITOR.          3J)5 

of  its  shares  at  the  date  of  the  return;  a  statement  in  detail  of  the 
entire  real  and  personal  property  of  said  companies  and  where  located, 
and  the  value  thereof  as  assessed  for  taxation.  Telegraph  and  tele- 
phone companies  were  required  to  return,  also  the  whole  length  of 
their  lines,  and  the  length  of  so  much  of  their  lines  as  is  without  and 
is  within  the  State  of  Ohio,  including  the  lines  controlled  and  used, 
under  lease  or  otherwise.  Express  companies  were  required  to  include 
in  the  return  a  statement  of  their  gross  receipts,  from  whatever  source 
derived,  for  the  year  ending  the  first  day  of  May,  of  husiness  wherever 
done;  and  of  the  business  done  in  the  State  of  Ohio,  giving  the  re- 
ceipts of  each  office  in  the  State;  also  the  whole  length  of  the  lines 
of  rail  and  water  routes  over  which  the  companies  did  business, 
within  and  without  the  State.  Provision  was  made  in  the  law  for 
the  organization  of  the  board,  for  the  appointing  of  one  of  its  members 
as  secretary  and  the  keeping  of  full  minutes  of  its  proceedings.  The 
board  was  required  to  meet  in  the  month  of  June  and  assess  the  value 
of  the  property  of  these  companies  in  Ohio.  The  rule  to  be  followed 
by  the  board  in  making  the  assessment  was  that  "in  determining  the 
value  of  the  property  of  said  companies  in  this  State,  to  be  taxed 
within  the  State  and  assessed  as  herein  provided,  said  board  shall  be 
guided  by  the  value  of  said  property  as  determined  by  the  value  of  the 
entire  capital  stock  of  said  companies,  and  such  other  evidence  and 
rules  as  will  enable  said  board  to  arrive  at  the  true  value  in  money 
of  the  entire  property  of  said  companies  within  the  State  of  Ohio,  in 
the  proportion  which  the  same  bears  to  the  entire  property  of  said 
companies,  as  determined  by  the  value  of  the  capital  stock  thereof, 
and  the  other  evidence  and  rules  as  aforesaid." 

The  valuation  of  all  the  real  estate  of  the  companies,  situated  in 
Ohio,  was  required  to  be  deducted  from  the  total  valuation,  as  fixed 
by  the  board. 

Provisions  were  made  for  hearings  and  for  the  correction  of  erro- 
neous and  excessive  valuations, 

Mr.  Justice  FULLER,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

The  legislation  in  question  is  claimed  to  be  repugnant  to  the  Con- 
stitution of  the  United  States  because  in  violation  of  the  commerce 
clause  of  that  instrument,  and  because  operating  to  deprive  appellants 
of  their  property  without  due  process  of  law  and  of  the  equal  pro- 
tection of  the  laws. 


396          LISTING  OF  PERSONS  AND  VALUATION. 

We  assume  that  the  assessments  complained  of  were  made  in  pur- 
suance of  the  definite  rule  or  principle  of  appraisement  recognized  and 
established  by  the  Nichols  law,  as  construed  by  the  Supreme  Court 
of  Ohio,  and  the  question  is  whether  the  law  prescribing  that  rule 
is  valid  under  the  Federal  Constitution. 

The  principal  contention  is  that  the  rule  contravenes  the  com- 
merce clause  because  the  assessments,  while  purporting  to  be  on  the 
property  of  complainants  within  the  State,  are  in  fact  levied  on 
their  business,  which  is  largely  interstate  commerce. 

Although  the  transportation  of  the  subjects  of  interstate  com- 
merce, or  the  receipts  received  therefrom,  or  the  occupation  or  busi- 
ness of  carrying  it  on,  cannot  be  directly  subjected  to  state  taxation, 
yet  property  belonging  to  corporations  or  companies  engaged  in  such 
commerce  may  be;  and  whatever  the  particular  form  of  the  exaction, 
if  it  is  essentially  only  property  taxation,  it  will  not  be  considered  as 
falling  within  the  inhibition  of  the  Constitution.  Corporations  and 
companies  engaged  in  interstate  commerce  should  bear  their  proper 
proportion  of  the  burdens  of  the  governments  under  whose  protection 
they  conduct  their  operations,  and  taxation  on  property,  collectible 
by  the  ordinary  means,  does  not  affect  interstate  commerce  other- 
wise than  incidentally,  as  .all  business  is  affected  by  the  necessity 
of  contributing  to  the  support  of  government.  Postal  Telegraph  Cable 
Co.  v.  Adams,  155  TL  S.  688. 

As  to  railroad,  telegraph  and  sleeping  car  companies,  engaged  in 
interstate  commerce,  it  has  often  been  held  by  this  court  that  their 
property,  in  the  several  States  through  which  their  lines  or  busi- 
ness extended,  might  be  valued  as  a  unit  for  the  purposes  of  taxa- 
tion, taking  into  consideration  the  uses  to  which  it  was  put  and  all 
the  elements  making  up  aggregate  value,  and  that  a  proportion  of 
the  whole  fairly  and  properly  ascertained  might  be  taxed  by  the  par- 
ticular State,  without  violating  any  Federal  restriction.  Western 
Union  Telegraph  Co.  v.  Massachusetts,  125  U.  S.  530;  Massachusetts 
v.  Western  Union  Telegraph  Co.,  141  U.  S.  40;  Maine  v.  Grand 
Trunk  Railway,  142  U.  S.  217 ;  Pittsburgh;  Cincinnati  &c.  Railway 
v.  Backus,  154  U.  S.  421 ;  Cleveland,  Cincinnati  &c.  Railway  v. 
Backus,  154  U.  S.  439;  Western  Union  Telegraph  Co.  v.  Taggart, 
163  U.  S.  1;  Pullman's  Palace  Car  Co.  v.  Pennsylvania,  141  U.  S. 
18.  The  valuation  was,  thus,  not  confined  to  the  wires,  poles  and 
instruments  of  the  telegraph  company ;  or  the  roadbed,  ties,  rails,  and 
spikes  of  the  railroad  company;  or  the  cars  of  the  sleeping  car  com- 
pany ;  but  included  the  proportionate  part  of  the  value  resulting  from 
the  combination  of  the  means  by  which  the  biisiness  was  carried  on, 


ADAMS  EX.  CO.  V.  OHIO  STATE  AUDITOR.          397 

a  value  existing  to  an  appreciable  extent  throughout  the  entire  domain 
of  operation.  And  it  has  been  decided  that  a  proper  mode  of  ascer- 
taining the  assessable  value  of  so  much  of  the  whole  property  as  is 
situate  in  a  particular  State,  is  in  the  case  of  railroads,  to  take  that 
part  of  the  value  of  the  entire  road  which  is  measured  by  the  pro- 
portion of  its  length  therein  to  the  length  of  the  whole,  Pittsburgh 
&c.  Railway  \.  Backus,  154  U.  S.  421;  or  taking  as  the  basis  of 
assessment  such  proportion  of  the  capital  stock  of  a  sleeping  car  com- 
pany as  the  number  of  miles  of  railroad  over  which  the  cars  are  run 
in  a  particular  State  bears  to  the  whole  number  of  miles  traversed 
by  them  in  that  and  other  States,  Pullmans  Palace  Car  Co.  v.  Penn- 
sylvania, 111  U.  S.  18;  or  such  a  proportion  of  the  whole  value  of 
the  capital  stock  of  a  telegraph  company  as  the  length  of  its  lines 
within  a  State  bears  to  the  length  of  all  its  lines  every  where,  de- 
ducting a  sum  equal  to  the  value  of  its  real  estate  and  machinery 
subject  to  local  taxation  within  the  State,  Western  Un.  Tel.  Co.  v. 
Taggart,  163  U.  S.  1. 

Doubtless  there  is  a  distinction  between  the  property  of  railroad 
and  telegraph  companies  and  that  of  express  companies.  The  physi- 
cal unity  existing  in  the  former  is  lacking  in  the  latter;  but  there 
is  the  same  unity  in  the  use  of  the  entire  property  for  the  specific 
purpose,  and  there  are  the  same  elements  of  value  arising  from  such 
use. 

The  cars  of  the  Pullman  Company  did  not  constitute  a  physical 
unity,  and  their  value  as  separate  cars  did  not  bear  a  direct  relation 
to  the  valuation  which  was  sustained  in  that  case.  The  cars  were 
moved  by  railway  carriers  under  contract,  and  the  taxation  of  the 
corporation  in  Pennsylvania  was  sustained  on  the  theory  that  the 
whole  property  of  the  company  might  be  regarded  as  a  unit  plant, 
with  a  unit  value,  a  proportionate  part  of  which  value  might  be 
reached  by  the  state  authorities  on  the  basis  indicated. 

Xo  more  reason  is  perceived  for  limiting  the  valuation  of  the  prop- 
erty of  express  companies  to  horses,  wagons  and  furniture,  than  that 
of  railroad,  telegraph  and  sleeping  car  companies,  to  roadbeds,  rails 
and  ties :  poles  and  wires :  or  cars.  The  unit  is  a  unit  of  use  and  man- 
agement, and  the  horses,  wagons,  safes,  pouches  and  furniture;  the 
contracts  for  transportation  facilities;  the  capital  necessary  to  earn' 
on  the  business.,  whether  represented  in  tangible  or  intangible  prop- 
erty, in  Ohio,  possessed  a  value  in  combination  and  from  use  in  con- 
nection with  the  property  and  capital  elsewhere,  which  could  as  right- 
fully be  recognized  in  the  assessment  for  taxation  in  the  instance  of 
these  companies  as  the  others. 


398          LISTING  OF  PERSONS  AND  VALUATION. 

We  repeat  that  while  the  unity  which  exists  may  not  be  a  physical 
unity,  it  is  something  more  than  a  mere  unity  of  ownership.  It  is  a 
unity  of  use,  not  simply  for  the  convenience  or  pecuniary  profit  of  the 
owner,  but  existing  in  the  very  necessities  of  the  case — resulting  from 
the  very  nature  of  the  business. 

The  same  party  may  own  a  manufacturing  establishment  in  one 
State  and  a  store  in  another,  and  may  make  profit  by  operating  the 
two,  but  the  work  of  each  is  separate.  The  value  of  the  factory  in 
itself  is  not  conditioned  on  that  of  the  store  or  vice  versa,  nor  is  the 
value  of  the  goods  manufactured  and  sold  affected  thereby.  The 
connection  between  the  two  is  merely  accidental  and  growing  out  of 
the  unity  of  ownership.  But  the  property  of  an  express  company  dis- 
tributed through  different  States  is  as  an  essential  condition  of  the 
business  united  in  a  single  specific  use.  It  constitutes  but  a  single 
plant,  made  so  by  the  very  character  and  necessities  of  the  business. 

It  is  this  which  enabled  the  companies  represented  here  to  charge 
and  receive  within  the  State  of  Ohio  for  the  year  ending  May  1,  1895, 
$282,181,  $358,819  and  $275,446,  respectively,  on  the  basis,  accord- 
ing to  their  respective  returns,  of  $42,065,  $28,438  and  $23,430,  of 
personal  property  owned  in  that  State,  returns  which  confessedly 
do  not,  however,  take  into  account  contracts  for  transportation  and 
accompanying  facilities. 

Considered  as  distinct  subjects  of  taxation,  a  horse  is,  indeed, 
a  horse ;  a  wagon,  a  wagon ;  a  safe,  a  safe ;  a  pouch,  a  pouch ;  but 
how  is  it  that  $23,430  worth  of  horses,  wagons,  safes  and  pouches  pro- 
duces $275,446  in  a  single  year?  or  $28,438  worth,  $358,519?  The 
answer  is  obvious. 

Reliance  seems  to  be  placed  by  counsel  on  the  observation  of  Mr. 
Justice  Lamar,  in  Pacific  Express  Company  v.  Seibert,  142  U.  S. 
339,  354,  that  "express  companies,  such  as  are  defined  by  this  act, 
have  no  tangible  property,  of  any  consequence,  subject  to  taxation 
under  the  general  laws.  There  is,  therefore,  no  way  by  which  they  can 
be  taxed  at  all  unless  by  a  tax  upon  their  receipts  for  business  tran- 
sacted." But  the  reference  was  to  the  legislation  of  the  State  of 
Missouri,  and  the  scheme  of  taxation  under  consideration  here  was  not 
involved  in  any  manner. 

Assuming  the  proportion  of  capital  employed  in  each  of  several 
States  through  which  such  a  company  conducts  its  operations  has 
been  fairly  ascertained,  while  taxation  thereon,  or  determined  with 
reference  thereto,  may  be  said  in  some  sense  to  fall  on  the  business 
of  the  company,  it  is  only  indirectly.  The  taxation  is  essentially  a 


ADAMS  EX.  CO.  V.  OHIO  STATE  AUDITOK.          399 

property  tax,  and,  as  such,  not  an  interference  with  interstate  com- 
merce. 

Xor,  in  this  view,  is  the  assessment  on  property  not  within 
the  jurisdiction  of  the  taxing  authorities  of  the  State  and  for  that 
reason  amounting  to  a  taking  of  property  without  due  process  of 
law.  The  property  taxed  has  its  actual  situs  in  the  State  and  is, 
therefore,  subject  to  the  jurisdiction,  and  the  distribution  among  the 
several  counties  is  a  matter  of  regulation  by  the  State  legislature. 
Pullman's  Palace  Car  Co.  v.  Pennsylvania,  141  U.  S.  18,  22; 
State  Railroad  Tax  Cases,  92  U.  S.  575;  Delaware  Railroad  Tax,  18 
Wall.  206;  Erie  Railroad  v.  Pennsylvania,  21  Wall.  492;  Columbus 
Southern  Railway  v.  Wright,  151  U.  S.  470. 

There  is  here  no  attempt  to  tax  property  having  a  situs  outside  of 
the  State,  but  only  to  place  a  just  value  on  that  within.  Presump- 
tively all  the  property  of  the  corporation  or  company  is  held  and  used 
for  the  purposes  of  its  business,  and  the  value  of  its  capital  stock  and 
bonds  is  the  value  of  only  that  property  so  held  and  used. 

Special  circumstances  might  exist,  as  indicated  in  Pittsburgh,  Cin- 
cinnati &c.  Railway  v.  Backus,  154  U.  S.  421,  443,  which  would 
require  the  value  of  a  portion  of  the  property  of  an  express  company 
to  be  deducted  from  the  value  of  its  plant  as  expressed  by  the  sum 
•total  of  its  stock  and  bonds  before  any  valuation  by  mileage  could 
be  properly  arrived  at,  but  the  difficulty  in  the  cases  at  bar  is  that 
there  is  no  showing  of  any  such  separate  and  distinct  property  which 
should  be  deducted,  and  its  existence  is  not  to  be  assumed.  It  is 
for  the  companies  to  present  any  special  circumstances  which  may 
exist,  and,  failing  their  doing  so,  the  presumption  is  that  all  their 
property  is  directly  devoted  to  their  business,  which  being  so,  a  fair 
distribution  of  its  aggregate  value  would  be  upon  the  mileage  basis. 

The  States  through  which  the  companies  operate  ought  not  to  be 
compelled  to  content  themselves  with  a  valuation  of  separate  pieces  of 
property  disconnected  from  the  plant  as  an  entirety,  to  the  propor- 
tionate part  of  which  they  extend  protection,  and  to  the  dividends 
of  whose  owners  their  citizens  contribute. 

We  are,  also,  unable  to  conclude  that  the  classification  of  express 
companies  with  railroad  and  telegraph  companies  as  subject  to  the 
unit  rule,  denies  the  equal  protection  of  the  laws.  The  provision  in 
the  Fourteenth  Amendment  "was  not  intended  to  prevent  a  State 
from  adjusting  its  system  of  taxation  in  all  proper  and  reason- 
able ways,"  nor  was  that  amendment  "intended  to  compel  a  State 


400          LISTING  OF  PERSONS  AND  VALUATION- 

to  adopt  an  iron  rule  of  equal  taxation."  Bell's  Gap  Railroad  v. 
Pennsylvania,  134  U.  S.  232. 

In  Pacific  Express  Co.  v.  Seibert,  142  U.  S.  339,  351,  in  which 
a  tax  on  gross  receipts  of  express  companies  in  the  State  of  Missouri 
was  sustained,  Mr.  Justice  Lamar,  speaking  for  the  court,  well 
says: 

"This  court  has  repeatedly  laid  down  the  doctrine  that  diver- 
sity of  taxation,  both  with  respect  to  the  amount  imposed  and  the 
various  species  of  property  selected  either  for  bearing  its  burdens 
or  for  being  exempt  from  them  is  not  inconsistent  with  a  perfect 
uniformity  and  equality  of  taxation  in  the  proper  sense  of  those 
terms;  and  that  a  system  which  imposes  the  same  tax  upon  every 
species  of  property  irrespective  of  its  nature  or  condition  or  class  will 
be  destructive  of  the  principle  of  uniformity  and  equality  in  taxation 
and  of  a  just  adaptation  of  property  to  its  burdens." 

And  see  Kentucky  Railroad  Tax  Cases,  115  U.  S.  321;  Home 
Insurance  Co.  v.  New  York,  134  U.  S.  594. 

The  policy  pursued  in  Ohio  is  to  classify  property  for  taxation, 
•when  the  nature  of  the  property,  or  its  use,  or  the  nature  of  the 
business  engaged  in,  requires  classification,  in  the  judgment  of  the 
legislature,  in  order  to  secure  equality  of  burden;  and  property  of 
different  sorts  is  classified  under  various  statutory  provisions  for 
the  purposes  of  assessment  and  taxation.  The  state  constitution 
requires  all  property  to  be  taxed  by  a  uniform  rule  and  according 
to  its  true  value  in  money,  and  it  was  held  by  the  Supreme  Court  of 
Ohio  in  State  v.  Jones  that  the  Nichols  law  did  not  violate  that 
requirement. 

In  Wagoner  v.  Loomis,  37  Ohio  St.  571,  it  was  ruled  that: 
"Statutory  provisions,  whereby  different  classes  of  property  are  listed 
and  valued  for  taxation  in  and  by  different  modes  and  agencies,  are 
not  necessarily  in  conflict  with  the  provisions  of  the  constitution 
which  require  all  property  to  be  taxed  by  a  uniform  rule  and  accord- 
ing to  its  true  value  in  money."  And  the  court  said :  "A  faithful 
execution  of  the  different  provisions  of  the  statutes  would  place  upon 
the  duplicate  for  taxation  all  the  taxable  property  of  the  State, 
whether  bank  stocks  or  other  personal  property  or  real  estate,  accord- 
ing to  its  true  value  in  money;  and  the  equality  required  by  the 
constitution  has  no  other  test." 

The  constitutional  test  was  held  to  be  complied  with,  whatever  the 
mode,  if  the  result  of  the  assessment  was  that  the  property  was 
assessed  at  its  true  value  in  money. 

Considering,   as   we   do,   that   the  unit  rule  may  be   applied   to 


GLOUCESTER  FERRY  CO.  V.  PENNSYLVANIA.      401 

express  companies  without  disregarding  any  other  Federal  restric- 
tion, we  think  it  necessarily  follows  that  this  law  is  not  open  to  the 
objection  of  denying  the  equal  protection  of  the  laws. 

We  have  said  nothing  in  relation  to  the  contention  that  these 
valuations  were  excessive.  The  method  of  appraisement  prescribed 
by  the  law  was  pursued  and  there  were  no  specific  charges  of  fraud. 
The  general  rule  is  well  settled  that  "whenever  a  question  of  fact  is 
thus  submitted  to  the  determination,  of  a  special  tribunal,  its  decis- 
ion creates  something  more  than  a  mere  presumption  of  fact,  and 
if  such  determination  comes  into  inquiry  before  the  courts  it  cannot 
be  overthrown  by  evidence  going  only  to  show  that  the  fact  was 
otherwise  than  as  so  found  and  determined/'  Pittsburgh,  Cincin- 
nati &c.  Railway  v.  Backus,  154  U.  S.  434;  Western  Union  Telegraph 
Co.  v.  Taggart.  163  U.  S.  1. 

Decrees  affirmed. 

Mr.  Justice  WHITE,  with  whom  concurred  Mr.  Justice  FIELD,  Mr. 
Justice  HARLAN  and  Mr.  Justice  BROWN,  dissenting. 

But  the  unit  rule  may  not  be  so  applied  as  to  include  property,  such  as 
investment  securities  in  which  a  surplus  is  invested,  which  is  not  used  in  the 
business  and  is  situated  outside  of  the  state.  Fargo  v.  Hart,  194  U.  S.  490. 


GLOUCESTER   FERRY  CO.  V.   PENNSYLVANIA. 

Supreme  Court  of  the  United  States.    October,  1884. 
114  United  States,  196. 

In  March,  1865,  the  Gloucester  Ferry  Company,  the  plaintiff  in 
error  here,  was  incorporated  by  the  legislature  of  New  Jersey  to 
establish  a  steamboat  ferry  from  the  town  of  Gloucester,  in  that  State, 
to  the  city  of  Philadelphia,  in  Pennsylvania,  with  a  capital  stock  of 
$50.000,  divided  into  shares  of  $50  each.  During  that  year  it  estab- 
lished, and  has  ever  since  maintained,  a  ferry  between  those  places, 
across  the  river  Delaware,  leasing  or  owning  steam  ferry-boats  for 
that  purpose.  At  each  place  it  has  a  slip  or  dock  on  which  passen- 
gers and  freight  are  received  and  landed;  the  one  in  Gloucester  it 
owns,  the  one  in  Philadelphia  it  leases.  Its  entire  business  consists 
in  ferrying  passengers  and  freight  across  the  river  between  those 
places.  It  has  never  transacted  any  other  business.  It  does  not  own, 
and  has  never  owned,  any  property,  real  or  personal,  in  the  city  of 
26 


402          LISTING  OF  PERSONS  AND  VALUATION. 

Philadelphia  other  than  the  lease  of  the  slip  or  dock  mentioned.  All 
its  other  property  consists  of  certain  real  estate  in  the  county  of 
Camden,  New  Jersey,  needed  for  its  business,  and  steamboats  engaged 
in  ferriage.  These  boats  are  registered  at  the  port  of  Camden,  New 
Jersey.  It  has  never  owned  any  boats  registered  at  a  port  of  Pennsyl- 
vania, and  its  boats  are  never  allowed  to  remain  in  that  State  except 
so  long  as  may  be  necessary  to  discharge  and  receive  passengers  and 
freight.  - 

In  July,  1880,  the  Auditor-General  and  the  Treasurer  of  the 
State  of  Pennsylvania  stated  an  account  against  the  Company  of  taxes 
on  its  capital  stock,  based  upon  its  appraised  value,  for  the  years 
1865  to  1879,  both  inclusive,  finding  the  amount  of  $2,593.96  to  be 
due  the  Commonwealth.  From  this  finding  an  appeal  was  taken  to 
the  Court  of  Common  Pleas  of  Philadelphia,  and  was  there  heard 
upon  a  case  stated,  in  which  it  was  stipulated  that,  if  the  court  were 
of  the  opinion  that  the  company  was  liable  for  the  tax,  judgment 
against  it  in  favor  of  the  Commonwealth  should  be  entered  for  the 
above  amount;  but  if  the  court  were  of  the  opinion  that  the  company 
was  not  liable,  judgment  should  be  entered  in  its  favor. 

A  statute  of  Pennsylvania,  passed  June  7,  1879,  "to  provide  revenue 
by  taxation,"  in  its  fourth  section  enacted  as  follows:  "That  every 
company  or  association  whatever,  now  or  hereafter  incorporated  by 
or  under  any  laws  of  this  Commonwealth,  or  now  or  hereafter  incor- 
porated by  any  other  State  or  Territory  of  the  United  States  or 
foreign  government,  and  doing  business  in  this  Commonwealth,  or 
having  capital  employed  in  this  Commonwealth  in  the  name  of  any 
other  company  or  corporation,  association  or  associations,  person  or 
persons,  or  in  any  other  manner,  except  foreign  insurance  companies, 
banks  and  savings  institutions,  shall  be  subject  to  and  pay  into 
the  treasury  of  the  Commonwealth  annually  a  tax  to  be  computed  as 
follows,  namely:  If  the  dividend  or  dividends  made  or  declared  by 
such  company  or  association  as  aforesaid,  during  any  year  ending 
with  the  first  Monday  of  November,  amount  to  six  or  more  than  six 
per  centum  upon  the  par  value  of  its  capital  stock,  then  the  tax  to  be 
at  the  rate  of  one-half  mill  upon  the  capital  stock  for  each  one  per 
centum  of  the  dividend  so  made  or  declared ;  if  no  dividend  be  made 
or  declared,  or  if  the  dividend  or  dividends  made  or  declared  do  not 
amount  to  six  per  centum  upon  the  par  value  of  said  capital  stock, 
then  the  tax  to  be  at  the  rate  of  three  mills  upon  each  dollar  of  a 
valuation  of  the  said  capital  stock,"  made  in  accordance  with  the 
provision  of  another  section  of  the  act. 

It  was  under  the  authority  of  this  act  that  the  taxes  in  question 


GLOUCESTER  FERRY  CO.  V.  PENNSYLVANIA.      403 

were  stated  against  the  company  by  the  Auditor-General  and  the  State 
Treasurer. 

The  Court  of  Common  Pleas  held  that  the  taxes  could  not  be  law- 
fully levied,  for  there  was  no  other  business  carried  on  by  the  company 
in  Pennsylvania  except  the  landing  and  receiving  of  passengers  and 
freight,  which  is  a  part  of  the  commerce  of  the  country,  and  pro- 
tected by  the  Constitution  from  the  imposition  of  burdens  by  State 
legislation.  It,  therefore,  gave  judgment  in  favor  of  the  Company. 
The  case  being  carried  on  a  writ  of  error  to  the  Supreme  Court  of 
the  State,  the  judgment  was  reversed  and  judgment  ordered  in  favor 
of  the  Commonwealth  for  the  amount  mentioned.  To  review  this 
latter  judgment,  the  case  was  brought  here. 

Mr.  Justice  FIELD  delivered  the  opinion  of  the  court.  He  stated 
the  facts  as  above  recited,  and  continued: 

The  Supreme  Court  of  the  State,  in  giving  its  decision  in  this 
case,  stated  that  the  single  question  presented  for  consideration  was 
whether  the  company  did  business  within  the  State  of  Pennsylvania 
during  the  period  for  which  the  taxes  were  imposed;  and  it  held 
that  it  did  do  business  there  because  it  landed  and  received  passen- 
gers and  freight  at  its  wharf  in  Philadelphia,  observing  that  its 
whole  income  was  derived  from  the  transportation  of  freight  and 
passengers  from  its  wharf  at  Gloucester  to  its  wharf  at  Philadelphia, 
and  from  its  wharf  at  Philadelphia  to  its  wharf  at  Gloucester; 
that  at  each  of  these  points  its  main  business,  namely,  the  receipt  and 
landing  of  freight  and  passengers,  was  transacted;  that  for  such 
business  it  was  dependent  as  much  upon  the  one  place  as  upon  the 
other;  that,  as  it  could  hold  the  wharf  at  Gloucester,  which  it  owned 
in  fee,  only  by  purchase  by  virtue  of  the  statutory  will  of  the  Legisla- 
ture of  New  Jersey ;  so  it  could  hold  by  lease  the  one  in  Philadelphia 
only  by  the  implied  consent  of  the  Legislature  of  the  Commonwealth ; 
r.nd  that,  therefore,  it  "was  dependent  equally,  not  only  for  its 
business,  but  its  power  to  do  that  business,  upon  both  States,  and 
might  therefore  be  taxed  by  both."  98  Penn.  St.  105,  116. 

As  to  the  first  reason  thus  expressed,  it  may  be  answered  that  the 
business  of  landing  and  receiving  passengers  and  freight  at  the  wharf 
in  Philadelphia  is  a  necessary  incident  to,  indeed  is  a  part  of,  their 
transportation  across  the  Delaware  River  from  New  Jersey.  Without 
it  that  transportation  would  be  impossible.  Transportation  implies 
the  taking  up  of  persons  or  property  at  some  point  and  putting  them 
down  at  another.  A  tax,  therefore,  upon  such  receiving  and  landing 
of  passengers  and  freight  is  a  tax  upon  their  transportation;  that 
'-.  upon  the  commerce  between  the  two  States  involved  in  such 
transportation. 


404          LISTING  OF  PERSONS  AND  VALUATION. 

It  matters  not  that  the  transportation  is  made  in  ferry-boats, 
which  pass  between  the  States  every  hour  of  the  day. 

As  to  the  second  reason  given  for  the  decision  below,  that  the 
company  could  not  lease  its  wharf  in  Philadelphia  except  by  the 
implied  consent  of  the  Legislature  of  the  Commonwealth,  and  thus 
is  dependent  upon  the  Commonwealth  to  do  its  business,  and  therefore 
can  be  taxed  there,  it  may  be  answered  that  no  foreign  or  inter- 
State  commerce  can  be  carried  on  with  the  citizens  of  a  State 
without  the  use  of  a  wharf,  or  other  place  within  its  limits  on 
which  passengers  and  freight  can  be  landed  and  received,  and  the 
existence  of  a  power  in  a  State  to  impose  a  tax  upon  the  capital  of 
all  corporations  engaged  in  foreign  or  inter-State  commerce  for  the 
use  of  such  places  would  be  inconsistent  with  and  entirely  subversive 
of  the  power  vested  in  Congress  over  such  commerce.  Nearly  all  the 
lines  of  steamships  and  of  sailing  vessels  between  the  United  States 
and  England,  France,  Germany  and  other  countries  of  Europe,  and 
between  the  United  States  and  South  America,  are  owned  by  corpo- 
rations; and  if  by  reason  of  landing  or  receiving  passengers  and 
freight  at  wharves,  or  other  places  in  a  State,  they  can  be  taxed 
by  the  State  on  their  capital  stock  on  the  ground  that  they  are  doing 
business  within  her  limits,  the  taxes  which  may  be  imposed  may 
embarrass,  impede,  and  even  destroy  such  commerce  with  the  citi- 
zens of  the  State.  If  such  a  tax  can  be  levied  at  all,  its  amount  will 
rest  in  the  discretion  of  the  State.  It  is  idle  to  say  that  the  interests 
of  the  State  would  prevent  oppressive  taxation.  Those  engaged  in 
foreign  and  inter-State  commerce  are  not  bound  to  trust  to  its 
moderation  in  that  respect;  they  require  security.  And  they  may 
rely  on  the  power  of  Congress  to  prevent  any  interference  by  the 
State  until  the  act  of  commerce,  the  transportation  of  passengers  and 
freight,  is  completed. 

It  is  true  that  the  property  of  corporations  engaged  in  foreign 
or  inter-State  commerce,  as  well  as  the  property  of  corporations 
engaged  in  other  business,  is  subject  to  State  taxation,  provided 
always  it  be  within  the  jurisdiction  of  the  State.  As  said  by  Chief 
Justice  Marshall  in  McCulloch  v.  Maryland,  4  Wheat.  316,  429,  "all 
subjects  over  which  the  sovereign  power  of  a  State  extends  are 
objects  of  taxation ;  but  those  over  which  it  does  not  extend  are,  upon 
the  soundest  principles,  exempt  from  taxation.  Thie  proposition 
may  almost  be  pronounced  self-evident." 

In  Hays  v.  Pacific  Mail  Steamship  Co.  17  How.  596,  the  defendant, 


GLOUCESTER  FERRY  CO.  V.  PENNSYLVANIA.      405 

a  corporation  of  New  York,  owned  ^team  vessels  employed  in  the 
transportation  of  passengers  and  freight  between  New  York  and 
San  Francisco,  and  between  New  York  and  different  ports  in  Oregon, 
which  were  registered  in  New  York.  ...  It  was  held  that 
the  vessels  were  not  subject  to  taxation  in  California,  as  they  were 
only  temporarily  there  while  engaged  in  lawful  trade  and  commerce. 

In  Morgan  v.  Parham,  16  Wall.  471,  it  was  held  that  a  vessel  regis- 
tered in  New  York  was  not  subject  to  taxation  in  Alabama,  though 
engaged  in  commerce  as  one  of  a  regular  line  of  steamers  between 
Mobile  in  that  State  and  New  Orleans  in  Louisiana. 

In  St.  Louis  v.  The  Ferry  Co.  11  Wall,  423,  the  company  was 
incorporated  by  Illinois  to  run  a  ferry  from  a  place  opposite  St. 
Louis  to  that  city  across  the  Mississippi. 

.  .  .  It  paid  a  ferry  license  to  St.  Louis  and  a  wharfage  tax 
for  the  use  of  its  wharf  there.  In  addition  to  these  charges  the 
city  authorities  assessed  a  tax  on  the  company  for  the  value  of  the 
boats  as  property  within  the  city,  all  property  within  it  being  tax- 
able under  a  statute  of  the  State.  The  court  held  that  the  tax 
was  illegally  levied,  a«  the  boats  were  not  property  within  the  city. 

In  the  recent  case  of  Commonu-ealth  of  Pennsylvania  v.  Standard 
Oil  Co.  101  Penn.  St.  119,  the  liability  of  foreign  corporations  doing 
business  within  that  State  is  elaborately  considered  by  its  Supreme 
Court. 

In  giving  its  decision  the  court  said  that  it  had  been  repeatedly 
decided  and  was  settled  law  that  a  tax  upon  the  capital  stock  of  a 
company  is  a  tax  upon  its  property  and  assets  (citing  to  that  effect 
a  large  number  of  decisions)  ;  that  it  was  undoubtedly  compecei  t  for 
the  legislature  to  lay  a  franchise  or  license  tax  upon  foreign  corpo- 
rations for  the  privilege  of  doing  business  within  the  State,  but 
that  the  tax  in  that  case  was  in  no  sense  a  license  tax ;  that  the  State 
had  never  granted  a  license  to  the  Standard  Oil  Company  to  do 
business  there,  but  merely  taxed  its  property,  that  is,  its  capital 
stock,  to  the  extont  that  it  brought  <uch  property  within  its  borders 
in  the  transaction  of  its  business;  that  the  position  of  the  Common- 
wealth, that  a  foreign  corporation  entering  the  State  to  do  business 
brought  its  entire  capital,  .was  ingenious,  but  unsound :  that  it  was 
a  fundamental  principle  that,  in  order  to  be  taxed,  the  person  must 


406          LISTING  OF  PERSONS  AND  VALUATION. 

have  a  domicil  within  the  State,  and  the  thing  must  have  a  situs 
therein;  that  persons  and  property  in  transitu  could  not  be  taxed; 
that  the  domicil  of  a  corporation  was  in  the  State  of  its  origin,  and 
it  could  not  emigrate  to  another  sovereignty;  that  the  domicil  of  the 
Standard  Oil  Company  was  in  Ohio,  and  when  it  sent  its  agents  into 
the  State  to  transact  business  it  no  more  entered  the  State  in  point  of 
fact  that  any  other  foreign  corporation,  firm,  or  individual  who  sent 
an  agent  there  to  open  an  office  or  branch  house,  nor  brought  its 
capital  there  constructively;  that  it  would  be  as  unreasonable  to 
assume  that  a  business  firm  in  Ohio  brought  its  entire  capital  there 
because  it  sent  its  agent  to  establish  a  branch  of  its  business,  as  to 
hold  that  the  Standard  Oil  Company,  by  employing  certain  persons 
in  the  State  to  transact  a  portion  of  its  business,  thereby  brought 
all  its  property  or  capital  stock  within  the  jurisdiction  of  the  State, 
that  there  was  neither  reason  nor  authority  for  such  a  proposition; 
that  the  company  was  taxable  only  to  the  extent  that  it  brought  its 
property  within  the  State;  and  that  its  capital  stock,  as  mentioned 
in  the  act  of  the  legislature,  must  be  construed  to  mean  so  much  of 
the  capital  stock  as  was  measured  by  the  property  actually  brought 
within  the  State  by  the  company  in  the  transaction  of  its  business. 
The  justice  who  delivered  the  opinion  of  the  court  added,  speaking 
for  himself,  that  he  conceded  the  power  of  the  Commonwealth  to 
exclude  foreign  corporations  altogether  frjom  her  borders,  or  to 
impose  a  license  tax  so  heavy  as  to  amount  to  the  same  thing;  but  he 
denied,  great  and  searching  as  her  taxing  power  is,  that  she  could 
tax  either  persons  or  property  not  within  her  jurisdiction.  "A  foreign 
corporation,"  he  said,  "has  no  domicil  here,  and  can  have  none ;  hence 
it  cannot  be  said  to  draw  to  itself  the  constructive  possession  of  its 
property  located  elsewhere.  There  are  a  large  number  of  foreign 
insurance  companies  doing  business  here  under  a  license  from  the 
State.  Some  of  them  have  a  very  large  capital.  It  is  usually  invested 
at  the  domicil  of  the  company.  If  the  position  of  the  Commonwealth 
is  correct,  she  can  tax  the  entire  property  of  the  Royal  Insurance 
Company,  although  the  same  is  located  almost  wholly  in  England,  or 
the  assets  of  the  New  York  Mutual,  located  in  New  York." 

Under  this  decision  there  is  no  property  held  by  the  Gloucester 
Ferry  Company  which  can  be  the  subject  of  taxation  in  Pennsylvania, 
except  the  lease  of  the  wharf  in  that  State.  Whether  that  wharf 
is  taxed  to  the  owner  or  the  lessee  it  matters  not,  for  no  question  hero 
is  involved  in  such  taxation.  It  is  admitted  that  it  could  be  taxed 
by  the  State  according  to  its  appraised  value.  The  ferry-boat?  of 
the  company  are  registered  at  the  port  of  Camden  in  New  Jersey,  and 


GLOUCESTER  FERRY  CO.  V.  PENNSYLVANIA.      4iT, 

according  to  the  decisions  in  Hays  v.  The  Pacific  Mail  Steamship 
Co.,  and  in  Morgan  v.  Parham,  they  can  be  taxed  only  at  their  home 
port.  According  to  the  decision  in  the  Standard  Oil  Company  case, 
and  by  the  general  law  on  the  subject,  the  company  has  no  domicil 
in  Pennsylvania,  and  its  capital  stock  representing  its  property  is 
hold  outside  of  its  limits.  It  is  solely,  therefore,  for  the  business  of 
the  company  in  landing  and  receiving  passengers  at  the  wharf  in 
Philadelphia  that  the  tax  is  laid,  and  that  business,  as  already  said,  is 
an  essential  part  of  the  transportation  between  the  States  of  Xew 
Jersey  and  Pennsylvania,  which  is  itself  inter-State  commerce.  While 
it  is  conceded  that  the  property  in  a  State  belonging  to  a  foreign 
corporation  engaged  in  foreign  or  inter-State  commerce  may  be 
taxed  equally  with  like  property  of  a  domestic  corporation  engaged 
in  that  business,  we  are  clear  that  a  tax  or  other  burden  imposed  on 
the  property  of  either  corporation  because  it  is  used  to  carry  on 
that  commerce,  or  upon  the  transportation  of  persons  or  property, 
or  for  the  navigation  of  the  public  waters  over  which  the  transporta- 
tion is  made,  is  invalid  and  void  as  an  interference  with,  and  an 
obstruction  of,  tiie  power  of  Congress  in  the  regulation  of  such 
commerce.  This  proposition  is  supported  by  many  adjudications. 

In  Steamship  Co.  v.  Port  Wardens,  6  Wall.  31,  it  was  held  that 
a  statute  of  Louisiana,  declaring  that  the  master  and  wardens  of 
the  port  of  Xew  Orleans  should  be  entitled  to  demand  and  receive 
in  addition  to  other  fees,  the  sum  of  five  dollars  for  every  vessel 
arriving  at  that  port,  whether  called  on  to  perform  any  service  or 
not,  was  unconstitutional  and  void,  as  imposing  a  burden  upon  com- 
merce, both  inter- State  and  foreign. 

In  Reading  Railroad  Company  v.  Pennsylvania,  sometimes  called 
the  case  of  the  State  Freight  Tax,  15  Wall.  232,  it  was  held  that  the 
act  of  the  Legislature  of  Pennsylvania  requiring  railroad  companies 
to  pay  the  State  Treasurer,  for  the  use  of  the  Commonwealth,  a  tax 
on  each  two  thousand  pounds  of  freight  carried,  was  unconstitutional 
and  void,  so  far  as  it  affected  commodities  transported  through  the 
State,  or  from  points  without  the  State  to  points  within  the  State,  or 
from  points  within  the  State  to  points  without  it,  as  being  a  regulation 
of  inter-State  commerce. 

In  Henderson  v.  The  Mayor  of  New  York,  92  IT.  S.  259,  an  act 
of  the  State  of  Xew  York  requiring  the  owner  or  consignee  of  a 
vessel  arriving  at  the  port  of  Xew  York  to  give  a  bond  for  every 


408          LISTING  OF  PERSONS  AND  VALUATION. 

passenger  in  a  penalty  of  $300,  with  two  sureties,  each  a  resident 
and  freeholder  conditioned  to  indemnify  the  Commissioners  of 
Emigration,  and  every  county,  city  and  town  in  the  State,  against 
any  expanse  for  the  relief  or  support  of  the  person  named  in  the 
bond,  for  four  years  thereafter,  but  allowing  in  commutation  of  the 
bond  a  payment  of  one  dollar  and  a  half  for  each  passenger  within 
twenty-four  hours  after  his  landing,  and  imposing  a  penalty  of 
$500  for  each  passenger  if  such  payment  were  not  made  within  that 
time,  the  penalty  to  be  a  lien  on  the  vessel,  was  held  to  be  unconsti- 
tutional and  void. 

These  cases  would  seem  to  be  decisive  of  the  character  of  the  busi- 
ness which  is  the  subject  of  taxation  in  the  present  case,  deceiving 
and  landing  passengers  and  freight  is  incident  to  their  transporta- 
tion. Without  both  there  could  be  no  such  thing  as  their  transporta- 
tion across  the  river  Delaware.  The  transportation,  as  to  passen- 
gers, is  not  completed  until,  as  said  in  the  Henderson  case,  they  are 
disembarked  at  the  pier  of  the  city  to  which  they  are  carried;  and, 
as  to  freight,  until  it  is  landed  upon  such  pier.  And  all  restraints 
by  exactions  in  the  form  of  taxes  upon  such  transportation,  or  upon 
acts  necessary  to  its  completion,  are  so  many  invasions  of  the  exclusive 
power  of  Congress  to  regulate  that  portion  of  commerce  between  the 
States. 

The  cases  where  a  tax  or  toll  upon  vessels  is  allowed  to  meet  the 
expenses  incurred  in  improving  the  navigation  of  waters  traversed  by 
them,  as  by  the  removal  of  rocks,  the  construction  of  dams  and 
locks  to  increase  the  depth  of  the  water  and  thus  extend  the  line  of 
navigation,  or  the  construction  of  canals  around  falls,  rest  upon  a 
different  principle.  The  tai  in  such  cases  is  considered  merely  as 
compensation  for  the  additional  facilities  thus  provided  in  the  navi- 
gation of  the  waters.  Kellogg  v.  Union  Co.  12  Conn.  7 ;  Thames  Bank 
v.  Lowell,  18  Conn.  500 ;  McReynolds  v.  Smallhouse,  8  Bush,  447. 

Upon  similar  grounds,  what  are  termed  harbor  dues  or  port  charges, 
exacted  by  the  State  from  vessels  in  its  harbors,  or  from  their  owners, 
for  other  than  sanitary  purposes,  are  sustained. 

It  is  true  that,  from  the  earliest  period  in  the  history  of  the  gov- 
ernment, the  States  have  authorized  and  regulated  ferries,  not  only 
over  waters  entirely  within  their  limits,  but  over  waters  separating 
them;  and  it  may  be  conceded  that  in  many  respects  the  States  can 
more  advantageously  manage  such  inter-State  ferries  than  the  gen- 


GLOUCESTEK  FERRY  CO.  V.  PENNSYLVANIA.      409 

oral  government;  and  that  the  privilege  of  keeping  a  ferry,  with  a 
right  to  take  toll  for  passengers  and  freight,  is  a  franchise  grantable 
by  the  State,  to  be  exercised  within  such  limits  and  under  such 
regulations  as  may  be  required  for  the  safety,  comfort  and  convenience 
of  the  public.  Still  the  fact  remains  that  such  a  ferry  is  a  means,  and 
a  necessary  means,  of  commercial  intercourse  between  the  States 
bordering  on  their  dividing  waters,  and  it  must,  therefore,  be  con- 
ducted without  the  imposition  by  the  States  of  taxes  or  other  burdens 
upon  the  commerce  between  them.  Freedom  from  such  impositions 
does  not,  of  course,  imply  exemption  from  reasonable  charges,  as 
compensation  for  the  carriage  of  persons,  in  the  way  of  tolls  or  fares, 
or  from  the  ordinary  taxation  to  which  other  property  is  subjected, 
any  more  than  like  freedom  of  transportation  on  land  implies  such 
exemption.  Reasonable  charges  for  the  use  of  property,  either  on 
water  or  land,  are  not  an  interference  with  the  freedom  of  transporta- 
tion between  the  States  secured  under  the  commercial  power  of  Con- 
gress. Packet  Co.  v.  Keokuk,  95  U.  S.  80;  Packet  Co.  v.  St.  Louis, 
100  U.  S.  423;  Viclcsburg  v.  Tobin,  100  U.  S.  430;  Packet  Co.  v. 
Catlettsburg,  105  U.  S.  559;  Transportation  Co.  v.  Parlcersburg,  107 
U.  S.  691. 

That  freedom  implies  exemption  from  charges  other  than  such  as 
are  imposed  by  way  of  compensation  for  the  use  of  the  property 
employed,  or  for  facilities  afforded  for  its  use,  or  as  ordinary  taxes 
upon  the  value  of  the  property.  How  conflicting  legislation  of  the 
two  States  on  the  subject  of  ferries  on  waters  dividing  them  is  to 
be  met  and  treated  is  not  a  question  before  us  for  consideration. 
Pennsylvania  has  never  attempted  to  exercise  its  power  of  establish- 
ing and  regulating  ferries  across  the  Delaware  River.  Any  one,  so 
far  as  her  laws  are  concerned,  is  free,  as  we  are  informed,  to  establish 
such  ferries  as  he  may  choose.  No  license  fee  is  exacted  from  ferry- 
keepers.  She  merely  exercises  the  right  to  designate  the  places  of 
landing,  as  she  does  the  places  of  landing  for  all  vessels  engaged  in 
commerce.  The  question,  therefore,  respecting  the  tax  in  the  present 
case  is  not  complicated  by  any  action  of  that  State  concerning  ferries. 
However  great  her  power,  no  legislation  on  her  part  can  impose  a  tax 
on  that  portion  of  interstate  commerce  which  is  involved  in  the  trans- 
portation of  persons  and  freight,  whatever  be  the  instrumentality  by 
which  it  is  carried  on. 

It  follows  that  upon  the  case  stated  the  tax  imposed  upon  the  ferry 
company  was  illegal  and  void. 

The  judgment  of  the  Supreme  Court  of  the  State  of  Pennsylvania 


410          LISTING  OF  PERSONS  AND  VALUATION. 

must,  therefore,  be  reversed  and.  the  case  remanded  for  further  pro- 
ceedings in  conformity  with  this  opinion. 

Other  cases  in  this  collection  on  the  situs  of  personal  property  are  St. 
Louis  v.  The  Ferry  Co.,  11  Wallace  (U.  S.)  423;  Savings  etc.,  Society  v. 
Multnomah  Co.,  169  U.  S.  421;  New  Orleans  v.  Stempel,  175  U.  S.  309; 
Kirtland  v.  Hotchkiss,  100  U.  S.  491 ;  Matter  of  Swift,  137  N.  Y.  77 ;  State  v. 
Dalrymple,  70  Md.  294,  supra. 


V.    TAXATION  OF  CORPORATE  STOCK. 
BELO  V.  COMMISSIONERS. 

Supreme  Court  of  North  Carolina.     January,  1880. 
82  North  Carolina  415. 

SMITH,  C.  J.  The  plaintiff  is  the  owner  of  three  hundred  and 
forty-five  shares  of  the  capital  stock  of  the  North  Carolina  railroad 
company,  which  have  been  assessed  and  charged  with  an  ad  valorem 
tax  in  the  manner  prescribed  by  law,  and  the  tax  list  has  been 
made  out  and  delivered  to  the  defendant,  Hill,  the  sheriff  of  For- 
syth,  for  collection.  This  suit  is  instituted  to  restrain  him  and  the 
county  commissioners  from  levying  and  collecting  the  tax,  on  the- 
ground  of  alleged  exemption  under  the  charter  of  the  company,  and 
for  the  further  reason  that  all  proper  taxes  upon  the  taxable  prop- 
erty of  the  company  are  paid  by  the  company. 

The  only  question  then  for  us  to  consider  is  this:  As  all  the 
property  of  the  company,  real  and  personal,  is  either  given  in  for 
taxation*  and  the  taxes  thereon  paid  by  the  company,  or  is  exempt 
under  the  act,  can  the  shares  in  the  hands  of  the  stockholders  be 
also  assessed  and  charged  as  an  independent  subject  of  taxation? 
The  question  is  scarcely  open  to  debate,  and  we  shall  only  refer  to 
some  among  the  many  authorities  sustaining  the  affirmative  of  the 
proposition. 

In  Gordon  v.  The  Appeal  Tax  Court,  3  How.  (U.  S.)  133,  Mr. 
Justice  Wayne  thus  expresses  himself:  "The  franchise  is  their  cor- 
porate property,  which  like  any  other  property,  would  be  taxable, 
if  a  price  had  not  been  paid  for  it.  The  capital  stock  is  another 
property,  corporately  associated  for  the  purpose  of  banking,  but  in 
its  parts,  is  the  individual  property  of  the  stockholders,  in  the  pro- 
portion- they  may  own  them;  and  being  their  individual  property, 


BELO  V.  COMMISSIONERS.  411 

they  may  be  taxed  for  it  as  they  may  for  any  other  property  they 

may  own A  franchise  for  banking  is,  in  every  state 

in  the  Union,  recognized  as  property.  The  banking  capital  attached 
to  the  franchise  is  another  property,  owned  in  its  parts  by  persons, 
corporate  or  natural,  for  which  they  are  liable  to  be  taxed,  as  they 
are  for  all  other  property,  for  the  support  of  government." 

In  an  able  opinion  of  the  author  of  that  valuable  work  on  rail- 
ways, commenting  on  the  law,  he  says:  "We  here  find  the  clear 
recognition  of  this  kind  of  corporate  property,  taxable  to  the  cor- 
poration, and  the  shares  in  the  hands  of  the  corporators,  distinctly 
defined  as  a  fourth  species  of  corporate  property,  taxable  only  to 
the  owners  or  holders.  1.  The  capital  stock;  2.  The  corporate 
property;  3.  The  franchise  of  the  corporation,  all  of  which  is  tax- 
able to  the  corporation;  and  the  shares  in  the  capital  stock  which 
are  taxable  only  to  the  shareholders."  1  Red.  Am.  R.  Cases,  497. 

A  tax  on  the  shares  of  stockholders  in  a  corporation  is  a  different 
thing  from  a  tax  on  the  corporation  itself,  or  its  stock,  and  may  be 
laid  irrespective  of  any  taxation  of  the  corporation  where  no  con- 
tract relations  forbid  it.  Cooley  Const.  Lim.,  169.  Field  on  Corp., 
521. 

A  share  of  stock  in  a  corporation  is  personal  estate  and  is  taxable 
to  the  owner  thereof,  as  other  personal  estate,  at  the  place  of  his 
residence.  Burroughs  Taxation,  §  90. 

Stock  in  a  corporation  is  in  the  nature  of  a  chose  in  action.  It 
has  no  locality  and  of  necessity  follows  the  person  of  the  owner. 
The  tax  upon  it  is  in  the  nature  of  a  tax  upon  income  which  of 
necessity  is  confined  to  the  person  of  the  owner.  1  Potter's  Law 
Corp.,  §  192. 

In  Massachusetts  it  has  been  decided  under  a  statute  of  that  state 
that  a  citizen  may  be  taxed  for  his  stock  in  a  turnpike  company  in 
another  state.  Great  Barrington  v.  Com'rs  of  Berkshire,  16  Pick., 
572. 

In  Van  Allen  v.  Assessors,  3  Wall.,  573,  it  is  held  that  shares  in 
a  National  bank  may  be  taxed  to  the  holder,  although  the  whole  cap- 
ital is  invested  in  securities  of  the  national  government,  which  an 
act  of  congress  declares  to  be  exempt  from  taxation  by  state  au- 
thority. 

These  references  are  sufficient  to  show  that  shares  of  stock  in  an 
incorporated  company  may  be  taxed  as  a  distinct  species  of  prop- 
erty, belonging  to  the  holder,  independently  of  the  taxation  imposed 
upon  the  value  of  the  franchise  and  upon  ihe  real  and  personal 
estate  of  the  corporation  itself. 


412          LISTING  OF  PEHSONS  AND  VALUATION. 

Has  the  legislature  exercised  its  power  to  tax  the  plaintiff's  stock 
upon  its  assessed  value,  and  thus  secured  the  uniformity  prescribed 
in  the  constitution? 

The  taxes  covered  by  the  restraining  order  were  levied  in  1878 
under  the  requirements  of  the  act  of  March  7th,  1877,  section  9  of 
which  prescribes  what  the  tax  lists  shall  contain,  and  in  paragraph 
6,  enumerates  the  following:  "Stock,  in  national,  state  and  pri- 
vate banks,  and  stocks  in  any  incorporated  company  or  joint  stock 
association,  railroad  or  canal  company,  and  their  estimated  value;'' 
and  this  valuation  is  charged  in  the  act  of  raising  revenue  with  the 
ad  valorem  tax  levied,  and  uniform  on  property.  The  stock  must  be 
listed  in  the  county  and  township  of  the  owner's  residence,  where 
he  resides  in  the  state,  as  was  decided  upon  the  construction  of  the 
statute  in  Buie  v.  Com'rs  of  Fayetteville,  79  N.  C.,  267. 

There  is  nothing  unreasonable  in  the  subjection  of  this  form  of 
property  to  its  share  of  the  common  burden  of  taxation,  necessary 
in  the  support  of  government.  Income  is  or  may  be  taxed,  unless 
in  the  special  case  forbidden  in  the  constitution,  from  whatever 
source  derived.  Dividends  are  but  net  profits  distributed  among  the 
shareholders,  and  if  they  must  be  taxed,  why  cannot  the  stock  be 
taxed  from  which  they  proceed? 

The  subject  may  be  considered  in  another  aspect.  The  relation 
of  the  stockholders  to  the  corporate  body,  for  the  purposes  of  the 
present  enquiry,  is  very  analogous  to  that  of  a  creditor  towards  his 
debtor.  The  means  and  resources  of  the  debtor,  in  connection  with 
the  skill,  industry  and  integrity,  impart  value  to  his  personal  obliga- 
tion, as  property  possessed  by  the  creditor.  It  is  not  pretended  that 
the  assessment  and  taxation  of  the  estate  of  the  former  where  he 
may  reside,  or  his  estate  may  be  found,  should  relieve  the  security, 
which  the  latter  holds,  from  liability  for  its  share  of  the  common 
burden.  The  same  principle,  and  with  equal  force,  may  be  applied 
to  the  stockholder  and  the  corporation.  The  latter  must  bear  the 
taxation  imposed  upon  its  property,  and  this  may  diminish  its  dis- 
tributable profits,  but  the  stockholder  cannot,  any  more  than  the 
creditor,  claim  exemption  on  this  account,  for  his  stock,  as  distinct 
and  separate  property  in  his  own  hands. 

It  must  therefore  be  declared  that  there  is  error  in  the  record 
and  the  judgment  must  be  reversed,  and  judgment  entered  here  that 
the  defendants  go  without  day  and  recover  their  costs,  and  it  is  so 
ordered. 

Error. 

Keversed. 


DYER  V.  OSBORNE.  413 


DYER  V.  OSBORNE. 

Supreme  Cowt  of  Rhode  Island.     March,  1876. 
11  Rhode  Island,  321. 

DURFEE,  C.  J.  This  is  an  action  on  the  case  to  recover  a  tax  of 
$280.00  assessed  on  the  defendant  in  the  Town  of  Tiverton  in  the 
year  1874.  The  defendant  pleads  in  bar  of  the  action,  that  in  com- 
pliance with  a  notice  given  by  the  assessors  as  prescribed  by  the 
statute,  Gen.  Stat.  R.  I.  chap.  40,  §  6,  he  rendered  an  account  on 
oath  as  required  by  §  7  of  that  chapter,  and  his  tax  was  duly  as- 
sessed by  the  assessors  upon  the  ratable  property  and  estate  in  said 
account  mentioned,  and  was  by  him  promptly  paid  to  the  collector 
of  taxes;  and  he  further  avers  and  pleads,  "the  taxes  in  the  plain- 
tiff's declaration  mentioned  were  assessed  upon  other  property  of 
the  defendant,  to  wit:  upon  forty  shares  of  the  capital  stock  or 
corporate  property  of  certain  manufacturing  corporations,  organized 
under  the  laws  of  the  Commonwealth  of  Massachusetts,  and  located 
with  their  said  property  in  the  city  of  Fall  River,  in  the  said  com- 
monwealth, which  said  shares  were  of  the  par  value  of  $40,000;  all 
of  which  said  capital  stock  of  said  corporations  was  then  invested* 
in  lands,  factory  buildings,  tenement  houses,  permanent  and  mov- 
able machinery  and  stock  in  process,  all  located  and  established  in 
Fall  River  aforesaid,  and  said  shares  in  the  said  corporate  property 
were  all  taxed  to  this  defendant  in  said  Fall  River  at  their  fair 
market  value,  and  which  said  tax  in  said  Fall  River  he  duly  paid; 
and  this  defendant  avers  that  the  tax  in  the  said  plaintiff's  declara- 
tion mentioned  was  assessed  on  the  said  shares  in  the  said  corpo- 
rate property,  and  not  upon  other  and  different  property  or  estate 
of  the  defendant,  and  that  the  said  property  was  not  ratable  in  the 
said  town  of  Tiverton,  and  that  the  said  tax  mentioned  in  the  plain- 
tiff's declaration  and  assessed  thereon,  was  and  is  illegal  and  void," 
etc.  To  this  plea  the  plaintiff  demurs. 

The  declaration  describes  the  defendant  as  "of  Tiverton,"  and  for 
anything  that  appears  in  the  plea,  he  was  a  citizen  or  inhabitant  of 
the  state,  having  his  domicil  in  that  town.  The  question,  therefore, 
which  is  presented  by  the  pleading  is,  whether  a  citizen  or  inhab- 
itant of  the  state  is  liable  to  pay  a  tax  assessed  against  him  in  "the 
town  of  his  domicil  upon  shares  of  stock  which  he  owns  in  a  man- 
ufacturing corporation  of  another  state,  he  having  been  taxed  and 
paid  the  tax  on  the  same  shares  in  such  other  state. 

The  question  arises  under  chapters  38  and  39  of  the  General  Stat- 


414          LISTING   OF  PERSONS  AND  VALUATION. 

utes.  The  first  section  of  chapter  38  declares  that  "all  real  property 
in  the  State,  and  all  personal  property  belonging  to  the  inhabitants 
thereof,  shall  be  liable  to  taxation,  unless  otherwise  specially  pro- 
vided." Section  10  of  chapter  39  declares  that  "personal  property, 
for  the  purposes  of  taxation,  shall  be  deemed  to  include  all  goods, 
chattels,  debts  due  from  solvent  persons,  moneys,  and  effects,  wher- 
ever they  may  be;  all  ships  or  vessels  at  home  or  abroad;  all  pub- 
lic stocks  and  securities,  except  those  issued  by  the  government  of 
the  United  States;  all  stocks  or  shares  in  any  bank  or  banking  as- 
sociation; in  any  turnpike,  bridge  or  other  corporation  within  or 
without  the  state,  except  such  as  are  exempted  from  taxation  by  the 
laws  of  the  state." 

The  language  is  plain.  It  clearly  makes  the  shares  of  any  cor- 
poration, whether  manufacturing  or  other,  whether  without  or 
within  the  state,  liable  to  taxation,  if  the  owner  is  an  inhabitant  of 
the  state,  unless  such  shares  are  exempted  from  taxation  by  the  laws 
of  the  state.  At  the  time  the  tax  now  sued  for  was  assessed,  shares 
in  the  stock  of  a  manufacturing  corporation  of  another  state  were 
not  exempted  from  taxation  by  the  laws  of  this  state.  Upon  what 
ground,  then,  can  we  hold  that  the  assessment  of  the  tax  was  illegal 
and  void? 

The  defendant  says  the  practice  of  assessors  in  regard  to  the  tax- 
ation of  such  shares  has  varied,  and  that  in  a  majority  of  the 
towns  such  shares  have  not  been  taxed  to  their  owners  living  in  this 
state.  A  practice  under  a  statute,  which  has  been  uniform  and 
long  continued,  is  entitled  to  weight  in  construing  a  statute,  if  the 
construction  is  open  to  serious  doubt.  The  practice  here  invoked 
has  not  been  uniform,  and  we  do  not  think  there  can  be  any  serious 
doubt  of  the  true  construction  of  the  statute. 

The  defendant  contends  that  the  assessment,  even  if  within  the 
statute,  was  illegal  and  void.  He  does  not  point  to  any  specific  pro- 
vision of  the  Constitution  of  either  the  state  or  the  United  States 
which  is  infringed  by  the  assessment,  or  by  the  statute  which  au- 
thorized it;  but  he  plants  himself  upon  the  broad  ground  that  the 
assessment  of  such  a  tax  is  not  the  exercise  of  a  legitimate  power  of* 
the  state.  He  has  cited  numerous  cases  which  he  contends  support 
this  position. 

The  doctrine  of  these  cases  appears  to  be  that  personal  property 
which  is  visible  and  tangible,  and  which  therefore  can  have  a  situs 
independent  of  its  owner,  may  for  certain  purposes,  and  especially 
for  taxation,  be  localized,  PO  to  speak,  and  subjected  directly  to  the 


DYEE  V.  OSBORNE.  415 

law  of  the  state  where  it  is  situated;  but  that  if  it  be  a  mere  debt 
or  pecuniary  obligation,  it  is  incapable  of  having  a  situs  apart  from 
its  owner,  and  therefore  can  only  be  taxed  to  its  owner  in  the  state 
where  he  resides.  We  do  not  find  anything  in  either  of  the  cases 
which  is  to  the  effect  that  the  shareholders  of  a  corporation  can 
only  be  taxed  in  the  state  where  the  corporation  is  situated. 

The  case  of  Trow'bridge  v.  Com.  of  Taxes,  11  N.  Y.  Supreme  Ct. 
595,  is  more  nearly  in  point.  It  was  held  in  that  case  that  the 
shares  of  a  foreign  corporation,  owned  in  New  York,  were  not  prop- 
erty within  that  state,  under  the  tax  law  of  that  state,  but  simply 
representatives  of  capital  or  property  invested  in  the  business  of 
the  corporation  in  the  state  where  it  was  situated.  The  case  seems 
to  hold  that  the  property  of  the  shareholders  is  not  distinguishable 
from  the  property  of  the  corporation,  and  therefore  cannot  have  a 
separate  situs  or  locality.  This  may  be  so  within  the  meaning  of 
the  tax  law  of  New  York,  but  ordinarily  the  property  of  sharehold- 
ers is  distinguishable  from  that  of  the  corporation;  for  whereas  the 
shares  are  and  must  be  personal  estate  of  the  nature  of  choses  in  ac- 
tion, the  property  of  the  corporation  may  be  real  estate  or  visible  and 
tangible  chattels  or  effects.  Angell  &  Ames  on  Corp.  (7th  ed.),  §§ 
560,  561  and  cases  cited;  Arnold  v.  Buggies,  1  E.  I.  167-9. 

There  are  cases  which  expressly  hold  that  an  owner  of  shares  in 
the  stock  of  a  foreign  corporation  is  liable  to  taxation  for  such 
shares  in  the  state  where  he  resides.  In  Great  Harrington  v.  County 
Commissioners  of  Berkshire,  16  Pick.  572,  under  a  statute  subject- 
ing to  taxation  "shares  or  property  in  any  incorporated  company  for 
a  bridge  or  a  turnpike  road,"  it  was  held  that  a  citizen  of  Massa- 
chusetts was  liable  to  be  taxed  in  that  state  for  his  stock  in  a  New 
York  turnpike  corporation,  notwithstanding  the  fact  that  under  the 
law  of  New  York  the  corporation  held  the  soil  of  the  road  in  fee. 
"No  exception,"  said  the  court,  "is  made  of  companies  in  other 
states,  and  the  court  perceive  no  reason  for  raising  any  by  impli- 
cation." 

In  McKeen  v.  The  County  of  Northampton,  49  Pa.  St.  519,  a 
person  residing  in  Pennsylvania  and  owning  472  shares  of  stock  in 
a  manufacturing  corporation  of  New  Jersey,  the  capital  of  which 
was  invested  in  a  foundry,  machine-shop,  and  other  real  estate  in 
New  Jersey,  and  taxed  under  the  laws  of  that  state,  was  held  liable 
to  taxation  for  his  shares  in  Pennsylvania  for  state  and  county  pur- 
poses. The  court  say:  "The  defendant  below,  being  a  citizen  of 
this  state,  it  is  clear  he  is  subject  personally  to  its  power  to  tax, 
and  that  all  his  property  accompanying  his  person,  or  falling  legiti- 


416          LISTING  OF  PERSONS  AND  VALUATION. 

mately  within  the  territorial  jurisdiction  of  the  state,  is  equally 
within  its  authority.  The  interest  which  an  owner  of  shares  has  in 
the  stock  of  a  corporation  is  personal ;  whithersoever  he  goes  it  ac- 
companies him,  and  when  he  dies  his  domicil  governs  its  succes- 
sion/' The  court  also  adverts  to  the  fact  that  the  tax  is  not  as- 
sessed upon  the  shares  specifically,  but  upon  the  person  of  their 
owner,  the  shares  being  merely  a  measure  of  taxation,  and  is  en- 
forced by  warrant  against  the  owner  personally  or  against  any  prop- 
erty he  has  whether  taxed  or  not.  See  also  Whitesell  v.  The  County 
of  Northampton,  49  Pa.  St.  526. 

It  has  been  held  that  shares  in  the  stock  of  a  corporation  are  tax- 
able as  such  to  their  owner,  though  the  corporation  is  itself  exempt 
from  taxation  by  charter;  Union  Bank  v.  The  State,  9  Yerg.  490; 
or  though  the  capital  of  the  corporation  is  invested  wholly  or  in 
part  in  United  States  bonds,  which  cannot  themselves  be  taxed. 
National  Bank  v.  Commonwealth,  9  Wall.  353;  St.  Louis  Building 
&  Savings  Association  v.  Lightner,  47  Mo.  393.  In  Union  Bank 
v.  The  State,  9  Yerg.  490,  the  doctrine  of  the  court  was  that  such 
a  tax  must  be,  from  its  very  nature,  a  tax  in  personam  and  not  in 
rem.  "Bank  stock/'  says  the  court,  "is  not  a  thing  in  itself  capable 
of  being  taxed  on  account  of  its  locality,  and  any  tax  imposed  upon 
it  must  be  in  the  nature  of  a  tax  upon  income,  and  of  necessity  con- 
fined to  the  person  of  the  owner,  and  if  he  be  a  non-resident,  he  i- 
beyond  the  jurisdiction  of  the  state  and  not  subject  to  her  laws." 

These  cases  are  to  the  effect,  that  shares  in  the  stock  of  a  corpora- 
tion are  in  the  nature  of  choses  in  action,  incorporeal,  and  have  no 
situs  independently  of  their  owner;  and  that,  consequently,  the 
state  has  jurisdiction  over  them  to  tax  them  by  having  jurisdiction 
over  their  owner,  the  tax  being  in  fact  a  tax  upon  the  owner  on 
account  of  his  ownership,  rather  than  upon  the  shares  themselves. 
In  the  light  of  these  cases,  we  think  the  defendant's  claim,  that  the 
tax  sued  for  could  not  be  legally  assessed  for  want  of  jurisdiction, 
cannot  be  sustained. 

The  plea  avers  that  the  defendant  has  already  paid  a  tax  assessed 
upon  the  shares  in  Massachusetts.,  It  is  doubtless  a  hardship  for 
him  to  pay  taxes  on  the  same  property  in  two  states.  But  the  Mas- 
sachusetts tax,  even  if  valid,  could  not  divest  this  state  of  its  juris- 
diction. The  laws  of  Rhode  Island  are  paramount  in  Rhode  Island, 
and  all  the  inhabitants  of  the  state  are  subject  to  them  without  re- 
gard to  the  laws  of  any  other  state.  If  there  be  any  ground  upon 
which  the  defendant  is  entitled  to  exoneration  because  of  the  Mas- 
sachusetts tax,  it  is  that  clause  of  our  Constitution,  which  declares 


STATE  V.  BEANIN.  417 

that  "the  burdens  of  the  state  ought  to  be  fairly  distributed  among 
its  citizens,"  and  upon  the  claim  that  it  is  unfair  to  tax  him  in 
Ehode  Island  for  property  on  which  he  has  paid  a  tax  in  Massa- 
chusetts. We  do  not  think,  however,  that  the  tax  ought  to  be  de- 
clared void  under  that  clause  of  the  Constitution.  It  would  cer- 
tainly be  going  too  far  to  hold  that  a  man  of  wealth,  living  in 
Ehode  Island,  cannot  be  taxed  at  all  in  Ehode  Island,  if  his  prop- 
erty is  all  invested  in  the  stocks  of  a  manufacturing  corporation  of 
another  state,  and  there  subject  to  taxation.  And  if  such  a  man  can 
be  taxed  at  all  in  Ehode  Island,  the  question  of  how  much,  is, 
within  reasonable  limits  at  least,  a  legislative,  not  a  judicial  ques- 
tion. 

The  defendant's  plea  will  be  overruled,  and  judgment  entered  for 
the  plaintiff  for  the  amount  of  the  tax  with  interest. 

Demurrer  sustained. 

There  is  no  objection  from  the  point  of  view  of  the  United  States  consti- 
tution to  taxing,  in  the  hands  of  shareholders,  shares  of  foreign  corporations 
whose  property  is  taxable  in  another  state,  Sturges  v.  Carter  114  U.  S.  511. 
This  is  not  the  rule  in  New  York.  People  ex  rel.  Trowbridge  v.  Corns.  4  Hun 
559,  affirmed  in  62  N.  Y.  630;  People  ex  rel.  Brown  v.  O'Roorke,  31  App.  Div. 
583-588. 


STATE  V.  BEANIN. 

Supreme  Court  of  New  Jersey.    November,  1852. 
3  Zabriskie  484. 

The  CHIEF  JUSTICE. 

The  third  exception  to  the  assessment  is,  that  the  prosecutor  was 
assessed  for  stocks  held  by  him  in  incorporated  banks  within  this 
state.  The  ground  of  this  objection  is,  that  the  entire  capital  stock 
of  the  banks  is  subjected  to  a  tax  of  the  one-half  of  one  per  cent., 
and  that  to  subject  the  same  property  to  a  tax  in  the  hands  of  the 
stockholders  would  be  in  effect  double  taxation. 

Admitting  that  the  taxation  be  double,  and  therefore  unequal  and 
unjust,  the  power  of  the  court  to  interfere  and  declare  it  illegal, 
except  in  cases  where  it  is  also  in  violation  of  some  provision  of  the 
constitution,  does  not  seem  to  be  clear. 

The  authorities  are  against  the  exercise  of  the  power,  except  where 

it  contravenes  some  constitutional  provision.     The  legislature,  from 
27 


418          LISTING  OF  PERSONS  AND  VALUATION. 

some  cause,  have  applied  a  rule  of  taxation  to  banks  different  from 
that  applied  to  other  corporations.  In  all  other  cases  where  the 
stock  in  the  hands  of  the  stockholder  is  taxed,  the  property  of  the 
corporation  is  exempted.  This  taxation  may,  in  its  operation  upon 
the  stockholders  in  the  hanks,  be  unequal,  oppressive,  and  unjust; 
but,  if  so,  the  remedy  is  not  with  this  court.  "The  interest,  wisdom, 
and  justice  of  the  legislature,  and  its  relations  with  its  constituents, 
furnish  the  only  security  where  there  is  no  express  contract  against 
unjust  and  excessive  taxation,  as  well  as  against  unwise  legislation 
generally."  Providence  Bank  v.  Billings,  4  Peters  563 ;  McCullough 
v.  Tlie  State  of  Maryland,  4  Wheat.  316;  Salem  Iron  Factory  v. 
Danvers,  10  Mass.  518;  Smith  v.  Burley,  9  New  Hamp.  423. 

The  taxation  of  both  corporation  and  shareholder  may  however  be  uncon- 
stitutional under  some  particular  state  contsitutional  provision  as  e.  g.  one 
which  requires  proportional  taxation.  See  Burke  v.  Bedlem,  57  Cal.  594. 
There  is,  however,  no  objection  from  the  point  of  view  of  the  United  States 
constitution  to  such  taxation.  Farrington  v.  Tenn.  95  U.  S.  679,  687,  but  the 
*  courts  will  not  presume  that  it  is  the  intention  of  the  legislature  to  impose  such 
double  taxation.  New  Orleans  v.  Houston,  119  U.  S.  265,  278;  Salem  Iron 
Factory  v.  Danvers,  98  Mass.  19. 


TAPPAN,  COLLECTOE  V.  MERCHANTS  NATIONAL  BANK. 

Supreme  Court  of  the  United  States.     October,  1873. 
19  Wallace,  490. 

Appeal  from  the  Circuit  Court  for  the  Northern  District  of  Illi- 
nois, in  which  court  the  Merchants'  National  Bank  of  Chicago — a 
bank  incorporated  under  the  "Act  to  provide  a  National  currency/' 
&c.,  approved  June  3,  1864,  (13  Stat.  at  Large,  99),  and  having 
its  banking  house  and  carrying  on  its  operations  of  discount  and 
deposit  in  the  town  of  South  Chicago,  Cook  County,  Illinois — filed 
a  bill  against  one  Tappan,  collector  of  county  and  municipal  taxes, 
in  the  said  town  of  South  Chicago,  Cook  County,  to  enjoin  his  col- 
lection of  such  taxes  upon  any  of  the  shares  of  stock  in  the  said 
bank,  assessed  under  a  statute  of  Illinois,  passed  June  13,  1867. 

The  court  below, considering  that  the  law  of  Illi- 
nois laying  the  tax  was  in  violation  of  its  constitution,  decreed  an 
injunction.  From  that  decree  this  appeal  was  taken. 


TAPPAN  V.  MERCHANTS  NATIONAL  BANK.        419 

The  CHIEF  JUSTICE  delivered  the  opinion  of  the  court. 

We  are  called  on  in  this  case  to  determine  whether  the  General 
Assembly  of  the  State  of  Illinois  could,  in  1867,  provide  for  the 
taxation  of  owners  of  shares  of  the  capital  stock  of  a  National 
bank  in  that  State,  at  the  place,  within  the  State,  where  the  bank- 
was  located,  without  regard  to  their  places  of  residence.  The  stat- 
ute of  Illinois,  under  the  authority  of  which  the  taxes  complained 
of  were  assessed,  was  passed  before  the  act  of  Congress,  approved 
February  10,  1863,  (15  Stat.  at  Large,  34)  which  gave  a  legislative 
construction  to  the  words  "place  where  the  bank  is  located,  and  not 
elsewhere/'  as  used  in  section  forty-one  of  the  National  Banking 
Act,  (13  Id.  112)  and  permitted  the  State  to  determine  and  direct 
the  manner  and  place  of  taxing  resident  shareholders,  but  provided 
that  non-residents  should  be  taxed  only  in  the  city  or  town  where 
the  bank  was  located. 

The  power  of  taxation  by  any  State  is  limited  to  persons,  prop- 
erty, or  business  within  its  jurisdiction.  (State  Tax  on  Foreign- 
held  Bonds,  Railroad  v.  Pennsylvania,  15  Wallace  319.)  Personal 
property,  in  the  absence  of  any  law  to  the  contrary,  follows  the  per- 
son of  the  owner,  and  has  its  situs  at  his  domicile.  But,  for  the 
purposes  of  taxation,  it  may  be  separated  from. him,  and  he  may 
be  taxed  on  its  account  at  the  place  where  it  is  actually  located. 
These  are  familiar  principles,  and  have  been  often  acted  upon  in 
this  court  and  in  the  courts  of  Illinois.  If  the  State  has  actual 
jurisdiction  of  the  person  of  the  owner,  it  operates  directly  upon 
him.  If  he  is  absent,  and  it  has  jurisdiction  of  his  property,  it 
operates  upon  him  through  his  property. 

Shares  of  stock  in  National  banks  are  personal  property.  They 
•are  made  so  in  express  terms  by  the  act  of  Congress  under  which 
such  banks  are  organized.  (13  Stat.  at  Large,  §  12.)  They  are  a 
species  of  personal  property  which  is,  in  one  sense,  intangible  and 
incorporeal,  but  the  law  which  creates  them  may  separate  them 
from  the  person  of  their  owner  for  the  purposes  of  taxation,  and 
give  them  a  situs  of  their  own.  This  has  been  done.  By  section 
forty-one  of  the  National  Banking  Act,  it  is  in  effect  provided  that 
all  shares  in  such  banks,  held  by  any  person  or  body  corporate,  may 
l)e  included  in  the  valuation  of  the  personal  property  of  such  per- 
son or  corporation  in  the  assessment  of  taxes  imposed  under  State 
authority,  at  the  place  where  the  bank  is  located,  and  not  else- 
where. (13  Stat.  at  Large,  112.) 

The  State,  therefore,  within  which  a  National  bank  is  situated 


420          LISTING  OF  PKKSONS  AND  VALUATION. 

has  jurisdiction,  for  the  purposes  of  taxation,  of  all  the  shareholders 
of  the  bank,  both  resident  and  non-resident,  and  of  all  its  shares, 
and  may  legislate  accordingly. 

The  State  of  Illinois,  thus  having  had,  in  1867,  the  right  to  tax 
all  the  shareholders  of  National  banks  in  that  State  on  account  of 
their  shares,  it  remains  to  consider  at  what  place  or  places  within 
the  State  such  taxes  could  be  assessed. 

It  is  conceded  that  it  was  within  the  power  of  the  State  to  tax 
the  shares  of  non-resident  shareholders  at  the  place  where  the  bank 
was  located,  but  it  is  claimed  that  under  the  constitution  of  the 
State  resident  shareholders  could  only  be  taxed  at  the  places  of  their 
residence.  We  have  not  been  referred  to  any  express  provision  of 
the  constitution  to  that  effect.  There  is  nothing  which  in  terms 
prohibits  the  General  Assembly  from  separating  personal  property 
within  the  State  from  the  person  of  the  owner  and  locating  it  at 
appropriate  places  lor  the  purposes  of  taxation,  but  it  is  insisted 
that  sections  two  and  five  of  Article  9  of  the  Constitution  of  1848, 
which  was  in  force  when  the  act  of  1867  was  passed,  contain  an  im- 
plied prohibition. 

The  constitution  does  not  undertake  to  fix  the  value  of  property. 
Neither  does  it  prescribe  any  rules  by  which  it  shall  be  fixed.  That 
is  left  to  the  General  Assembly,  for  the  provision  in  that  respect  is, 
"such  value  to  be  ascertained  by  some  person  or  persons  to  be 
elected  or  appointed  in  such  manner  as  the  General  Assembly  shall 
direct,  and  not  otherwise/'  The  mode  and  manner  in  which  the 
persons  appointed  to  make  the  valuation  shall  proceed,  are  left  to 
the  discretion  of  the  General  Assembly.  In  fact,  the  whole  ma- 
chinery of  taxation  must  be  contrived  and  put  into  operation  by  the 
legislative  department  of  the  government. 

As  part  of  this  machinery  taxation  districts  must  be  created.  All 
property  within  the  district  must  be  taxed  by  a  uniform  rate.  If 
property  is  actually  within  a  district  it  is  but  proper  that  the 
legislature  should  provide  that  it  should  be  listed,  valued  and  as- 
sessed there.  In  fact,  the  last  clause  of  section  five,  Article  9,  seems 
to  make  that  a  duty,  for  it  provides  that  the  General  Assembly  shall 
require  that  all  property  within  the  limits  of  municipal  corpora- 
tions, belonging  to  individuals,  shall  be  taxed  for  the  payment  of 
debts  contracted  under  authority  of  law. 

This  power  of  locating  personal  property  for  the  purpose  of  tax- 
ation without  regard  to  the  residence  of  the  owner  has  often  been 
exercised  in  Illinois,  and  sustained  by  the  courts. 


TAPPAN  V.  MERCHANTS  NATIONAL  BANK.        421 

The  question  is  then  presented  whether  the  General  Assembly, 
having  complete  jurisdiction  over  the  person  and  the  property,  could 
separate  a  bank  share  from  the  person  of  the  owner  for  the  pur- 
poses of  taxation. 

A  share  of  bank  stock  may  be  in  itself  intangible,  but  it  repre- 
sents that  which  is  tangible.  It  represents  money  or  property  in- 
vested in  the  capital  stock  of  the  bank.  That  capital  is  employed" 
in  business  by  the  bank,  and  the  business  is  very  likely  carried  on 
at  a  place  other  than  the  residence  of  some  of  the  shareholders. 
The  shareholder  is  protected  in  his  person  by  the  government  at  the 
place  where  he  resides;  but  his  property  in  this  st'ock  is  protected 
at  the  place  where  the  bank  transacts  his  business.  If  he  were  a 
partner  in  a  private  bank  doing  business  at  the  same  place,  he  might 
be  taxed  there  on  account  of  his  interest  in  the  partnership.  It  is 
not  easy  to  see  why,  upon  the  same  principle,  he  may  not  be  taxed 
there  on  account  of  his  stock  in  an  incorporated  bank.  His  business 
is  there  as  much  in  the  one  case  as  in  the  other.  He  requires  for  it 
the  protection  of  the  government  there,  and  it  seems  reasonable  that 
he  should  be  compelled  to  contribute  there  to  the  expenses  of  main- 
taining that  government.  It  certainly  cannot  be  an  abuse  of  legis- 
lative discretion  to  require  him  to  do  so.  If  it  is  not,  the  General 
Assembly  cr.n  rightfully  locate  his  shares  there  for  the  purpose  of 
taxation. 

But  it  is  said  to  be  a  violation  of  the  constitutional  rule  of  uni- 
formity to  compel  the  owner  of  a  bank  share  to  submit  to  taxation 
for  this  part  of  his  property  at  a  place  other  than  his  residence,  be- 
cause other  residents  are  taxed  for  their  personal  property  where 
they  reside.  It  is  a  sufficient  answer  to  this  proposition  to  say  that 
all  persons  owning  the  same  kind  of  property  are  taxed  as  he  is 
taxed.  Absolute  equality  in  taxation  can  never  be  attained.  That 
system  is  the  best  which  comes  the  nearest  to  it.  The  same  rule-; 
cannot  be  applied  to  the  listing  and  valuation  of  all  kinds  of  prop- 
erty. Railroads,  banks,  partnerships,  manufacturing  associations, 
telegraph-companies,  and  each  one  of  the  numerous  other  agencies 
of  business  which  the  inventions  of  the  age  are  constantly  bringing 
into  bu?iness,  require  different  machinery  for  the  purposes  of  their 
taxation.  The  object  should  be  to  place  the  burden  so  that  it  will 
bear  as  nearly  as  possible  equally  upon  all.  For  this  purpose,  dif- 
ferent systems,  adjusted  with  reference  to  the  valuation  of  different 
kinds  of  property  arc  adopted.  The  courts  permit  this.  Thus,  in  a 
case  in  Illinois,  involving  the  system  adopted  for  the  taxation  of 


422          LISTING  OF  PERSONS  AND  VALUATION. 

bank  shares,  it  was  said  by  the  Supreme  Court,  (McVeagk  v.  Chi- 
cago, 49  Illinois,  329),  "in  view  of  this  legislation  it  must  be  ap- 
parent that  a  system  of  taxation  for  bank  shares  was  designed  pecu- 
liar to  itself  and  independent  of  the  general  revenue  laws  of  the 
State;"  and  the  authority  of  the  law  was  sustained  and  enforced. 

Again,  it  is  said  that  the  law  in  question  destroys  the  uniformity 
of  taxation,  because  it  provides  for  the  collection  of  the  taxes  as- 
sessed on  account  of  this  kind  of  property  in  an  unusual  way.  The 
constitution  does  not  require  uniformity  in  the  manner  of  collec- 
tion. Uniformity  in  the  assessment  is  all  it  demands.  When  as- 
sessed the  tax  may  be  collected  in  the  manner  the  law  shall  pro- 
vide; and  this  may  be  varied  to  suit  the  necessities  of  each  case. 

We  have  not  felt  called  upon  to  consider  whether  the  General 
Assembly  could,  under  the  provisions  of  the  act  of  Congress,  pro- 
vide for  the  taxation  of  shareholders  at  any  other  place  within  the 
State  than  that  in  which  the  bank  is  located.  It  is  sufficient  for  the 
purposes  of  this  case  that  it  might  tax  them  there. 

Decree  reversed,  and  the  cause  remanded  with  instructions  to  pro- 
ceed 

IN    CONFORMITY    AVITH    THIS    OPINION. 
See  also  New  Orleans  v.  Stempel  175  U.  S.  309,  Supra. 


PELTON  V.  NATIONAL  BANK. 

Supreme  Court  of  the  United  States.     October,  1879. 
101  United  States  143. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 

The  Commercial  National  Bank  of  Cleveland,  Ohio,  organized 
under  the  act  of  Congress  of  1864,  creating  a  national  banking  sys- 
tem, and  by  virtue  thereof  entitled  to  sue  in  the  circuit  courts  of 
the  United  States,  brought  this  bill  in  equity  to  enjoin  Pel  ton,  the 
treasurer  of  the  county  of  Cuyahoga,  in  which  the  city  of  Cleve- 
land is  situate,  from  collecting  a  tax  alleged  to  be  illegal.  .  .  . 

It  is  ....  alleged  that  the  tax,  as  assessed,  is  greater 
than  that  assessed  on  other  moneyed  capital  in  the  hands  of  indi- 
viduals, citizens  of  that  State,  and  is,  therefore,  in  conflict  with 
sect.  5219  of  the  Revised  Statutes  of  the  United  States. 


PELTON  V.  NATIONAL  BANK.  423 

The  decree  below  was  in  favor  of  the  complainant,  and  Pelton  ap- 
pealed to  this  court. 

The  bill  states  very  distinctly  that  the  principle  on  which  the 
valuation  of  the  shares  of  the  bank  for  taxation  is  made  "destroys 
the  uniformity  of  the  rule  fixed  by  the  Constitution,  and  violates 
the  obligation  thereby  imposed  to  treat  all  property  alike,  to  the 
end  that  all  property  may  bear  an  equal  burden  of  taxation,  and  is 
subversive  of  the  act  of  Congress  allowing  such  shares  to  be  taxed 
and  intended  to  protect  the  owners  thereof  from  greater  burdens 
than  were  imposed  on  other  moneyed  capital  at  the  place  where  the 
bank  was  located."  "The  necessary  effect,"  it  is  added,  "of  the  pro- 
ceedings had  in  the  assessment  and  levy  of  the  taxes  standing 
against  the  shareholders  of  your  orator,  and  now  about  to  be  en- 
forced, has  been  to  deprive  such  shareholders,  both  in  the  matter  of 
valuation  and  equalization,  of  all  benefit  of  the  Constitution  and 
general  laws  of  the  State,  by  which  only  uniformity  in  the  burden 
of  taxation  upon  all  descriptions  of  property  could  be  secured,  to 
take  from  them  the  security  afforded  by  the  limitation  in  the  act  of 
Congress  and  to  impose  upon  them  such  excessive  exactions  as  to 
make  the  franchises  granted  by  said  act  comparatively  useless."  The 
answer,  by  way  of  denial,  says  that  "the  taxes  mentioned  in  said 
complainant's  bill,  assessed  upon  the  shares  of  said  complainant's 
banking  association,  are  not  taxed  at  a  greater  rate  than  is  imposed 
by  the  State  of  Ohio  upon  other  moneyed  capital  in  the  hands  of  in- 
dividual citizens  of  said  State  resident  in  the  city  of  Cleveland, 
where  said  banking  association  is  established  and  located." 

It  is  thus  very  clear  that  the  question,  whether  the  taxation  of 
which  the  bank  complained  was  a  tax  on  its  shares  greater  than 
that  on  other  moneved  capital  invested  in  Cleveland,  was  fairly 
raised  by  the  pleading. 

The  argument  is  advanced  here  which  we  considered  in  People  v. 
Wetn-cr  (100  U.  S.  539),  namely,  that  if  the  amount  of  tax  as- 
sessed on  these  bank  shares  is  governed  by  the  same  percentage  on 
the  valuation  as  that  applied  to  other  moneyed  capital,  the  act  of 
Congress  is  satisfied,  though  a  principle  of  valuation  is  adopted 
by  which  inequality  and  injustice  to  the  owners  of  them  must 
necessarily  result.  We  do  not  propose  to  go  over  that  argument 
again.  The  cases  were  considered  together  in  conference,  because 
they  involved  that  principle.  It  is  sufficient  to  say  that  we  are  quite 
satisfied  that  any  system  of  assessment  of  taxes  which  exacts  from 
the  owner  of  the  shares  of  a  national  hank  a  larger  sum  in  propor- 


424          LISTING  OF  PERSONS  AND  VALUATION. 

tion  to  their  actual  value  than  it  does  from  the  owner  of  other 
moneyed  capital  valued  in  like  manner,  does  tax  them  at  a  greater 
rate  within  the  meaning  of  the  act  of  Congress. 

It  is  not  asserted  that  any  different  percentage  on  the  valuation 
established  was  applied  to  these  two  classes  of  capital.  The  bill  very 
clearly  shows  that  the  source  of  the  evil  was  in  the  unequal  valua- 
tion. 

Taking  the  answer,  with  the  meaning  which  the  counsel  who 
drew  it  attaches  in  argument  here  to  the  words,  "taxed  at  a  greater 
rate,"  it  may  be  said  to  amount,  as  a  negative  pregnant,  to  an  ad- 
mission that  the  valuation  was  unequal,  as  charged  in  the  bill.  Not 
only  so,  but  it  is  not  denied  in  argument  that  while  all  the  per- 
sonal property  in  Cleveland,  including  moneyed  capital  not  invest- 
ed in  banks,  was  in  the  assessment  valued  far  below  its  real  worth, 
say  at  one-half  or  less,  the  shares  of  the  banks,  after  deducting  the 
real  estate  of  the  banks  separately  taxed,  were  assessed  at  their  full 
value,  or  very  near  it.  The  only  witness  who  testified  on  the  sub- 
ject in  this  case  at  all  was  the  auditor  of  the  county  of  Cuyahoga 
for  the  years  1876  and  1877,  who  had  been  for  many  years  pre- 
viously an  employe  in  the  auditors  office.  He  says  that,  as  county 
auditor,  he  was  a  member  of  the  board  of  county  equalization,  and 
acted  as  such  in  equalizing  during  those  years  the  valuation  of  the 
shares  of  the  various  national  and  other  banks;  that  the  valuation 
placed  on  the  shares  of  national  banks  was  higher  in  proportion 
than  the  valuation  on  other  personal  property,  including  banking 
capital.  He  says  that  the  matter  was  talked  over  in  the  board,  and 
it  was  their  aim  to  make  the  valuation  higher,  and  that  their  val- 
uation of  national  bank  shares  was  intentionally  higher  than  the 
assessed  value  returned  by  private  banks. 

It  is  necessary  here  to  examine  into  the  mode  of  assessing  the  tax 
as  provided  in  the  act  of  1877,  which  related  solely  to  the  tax  on 
,  bank  shares.  The  first  section  required  the  cashier  of  every  incor- 
porated bank  to  make  report  to  the  county  auditor  of  the  names 
and  residences  of  its  shareholders,  the  par  value  of  each  share,  and 
other  facts  necessary  to  enable  the  auditor  to  ascertain  the  value  of 
those  shares.  The  second  section  required  the  auditor  to  assess 
them  at  their  true  value  in  money,  after  deducting  the  real  estate, 
and  to  transmit  the  assessment  with  the  report  of  the  auditor  to 
the  annual  board  of  equalization  of  the  county  in  which  the  bank 
was  located.  This  board  was  composed,  in  cities  of  the  class  to 
which  Cleveland  belonged,  of  the  county  auditor  and  six  citizens  ap- 
pointed by  the  city  council.  By  the  third  section  this  board  was 


PELTON  V.  NATIONAL  BANK.  425 

authorized  to  hear  complaints  and  equalize  the  valuation  of  the 
shares  of  such  banks  or  banking  association,  as  fixed  by  him,  and 
with  full  authority  to  equalize  such  shares  according  to  their  true 
value  in  money.  It  is  to  be  remembered  that  the  witness  whose 
testimony  we  have  stated  was  the  county  auditor  who  made  the  first 
assessment  or  valuation  of  these  shares,  and  he  was  a  member  of 
this  city  board  which  had  authority  to  equalize  that  valuation.  It 
was  of  this  city  board  he  was  speaking  when  he  said  that  they  had 
assessed  bank  shares  generally  higher  than  other  personal  property, 
including,  of  course  other  moneyed  capital;  and  that  they  had  as- 
sessed the  shares  of  the  national  banks  higher  than  private  banks, 
and.  that  it  was  their  aim  to  do  so.  It  is  also  important  to  observe 
in  reference  to  another  view  of  the  question,  presently  to  be  consid- 
ered, that  this  discrimination  was  neither  an  accident  or  a  mistake, 
nor  a  rule  applied  only  to  this  bank,  but  that  it  was  a  principle  de- 
liberately adopted  to  govern  their  action  in  the  valuation  of  all  the 
shares  of  national  banks,  and  was  applied  to  them  all  without  ex- 
ception. It  appears  by  the  testimony  of  this  witness  that  there 
were  seven  national  banks  in  the  city  of  Cleveland  whose  shares, 
as  equalized  by  the  city  board  for  taxation,  amounted  to  $3,236,500, 
to  all  of  which  this  rule  of  valuation,  making  their  taxes  much 
higher  than  on  other  moneyed  capital,  was  applied,  and  that  this 
was  done  for  two  years  at  least,  and  probably  many  more. 

This  act  of  1877,  however,  provided  another  board  of  equaliza- 
tion, composed  of  the  auditor  of  state,  treasurer  of  state,  and  attor- 
ney-general, to  whom  all  the  assessments  of  bank  shares  made  by 
the  county  and  city  boards  were  to  be  referred,  and  to  whom  no 
other  property  was  referred,  for  an  equalization  which  included  the 
whole  State.  This  board  could  do  no  more  than  increase  or  dimin- 
ish the  valuation  of  such  shares  for  each  county  and  city,  so  as  to 
make  them  conform  to  some  standard  of  equality  among  themselves 
which  that  board  might  adopt.  But  the  result  of  their  action  must 
be  such  that  it  did  not  increase  or  diminish  the  aggregate  value  of 
the  amount  returned  by  the  county  auditors  of  the  whole  State 
more  than  $100,000. 

This  board,  for  the  taxes  now  in  contest,  increased  the  valuation 
of  the  shares  of  the  complainant  $250,000  above  the  sum  of  $912,- 
000,  at  which  it  had  been  assessed  by  the  county  board,  and  it  in- 
creased the  valuation  of  the  shares  of  all  the  national  banks  of 
Cleveland  from  the  sum  of  $3,236,500  to  $4,046,045. 

It  is  thus  seen  that  the  auditor  and  the  city  board  of  equaliza- 
tion valued  these  shares  higher  in  proportion  to  other  moneyed  cap- 


426          LISTING  OF  PERSONS  AND  VALUATION. 

ital  in  Cleveland  to  an  extent  which  the  witness  does  not  state,  but 
which  may  be  supposed  to  be  thirty  per  cent,  as  it  is  shown  to  be  in 
comparison  with  real  estate;  and  the  State  board  added  about  one- 
fourth  to  that,  so  that  the  tax  on  the  national  bank  shares,  against 
which  relief  is  sought  in  this  suit,  is  between  fifty  and  sixty  per 
cent  on  its  real  value  greater  than  on  other  moneyed  capital,  and, 
therefore,  to  that  extent  forbidden  by  the  act  of  Congress. 

For  this  injustice  and  this  violation  of  the  law  there  ought  to  be 
some  remedy.  To  the  specific  one  of  an  injunction  by  a  suit  in 
chancery,  and,  indeed,  to  any  remedy  by  the  bank,  many  objections 
are  raised;  but  all  of  them  have  been  considered  and  overruled  in 
the  case  of  Cummings  v.  National  Bank  (infra,  p.  153),  which  was 
argued  at  the  same  time  this  case  was,  it  is  unnecessary  to  repeat 
here  what  is  said  in  that  case. 

As  the  complainant  has  paid  so  much  of  this  tax  as  was  not  in 
violation  of  the  act  of  Congress,  we  think  the  decree  of  the  Circuit 
Court  enjoining  the  collection  of  the  remainder  was  right. 

,  Decree  affirmed. 

Mr.  Chief  Justice  WAITE  dissented. 

A  higher  rate  of  taxation  may  not  be  imposed  on  national  bank  stock  than  on 
other  moneyed  capital  except  where  the  state  is  restrained  by  valid  contract 
entered  into  by  it  e.  g.  with  a  state  bank,  Leonburger  v.  Rouse,  9  Wallace  (U. 
S.)  468,  and  except  where  partial  exemption  of  certain  property  has  been 
made  to  avoid  double  taxation.  Hepburn  v.  School  Directors,  23  Wallace  (U. 
S.)  480;  Adams  v.  Nashville,  95  U.  S.  19.  But  "other  moneyed  capital"  does 
not  include  trust  company  stock  where  the  trust  company  is  not  engaged  in 
banking  business.  Mercantile  National  Bank  v.  Mayor  121  U.  S.  138.  See 
also  Mercantile  National  Bank  v.  New  York,  172  N.  Y.  35. 

Further  if  deduction  for  debt  from  assessment  for  personal  property  is 
permitted,  such  deduction  must  be  permitted  in  case  of  assessment  for  national 
bank  stock.  People  v.  Weaver,  100  U.  S.  539. 

Finally.  States  may  tax  national  banks  only  in  the  way  permitted  by  the 
act  of  Congress.  Owensboro  National  Bank  v.  Owensboro  173  U.  S.  664. 


STATE  EX  REL.  ROE  V.  WILLISTON.  427 

VI.    ASSESSMENT  TO  OWNER. 
STATE  EX  REL.  ROE  V.  WILLISTON. 

Supreme  Court  of  Wisconsin.     January,  1866. 
20  Wisconsin  228. 

In  1853,  a  tract  of  land,  14^  rods  wide  and  64  rods  deep,  in  the 
city  of  Janesville,  was  sold  and  conveyed  to  J.  M.  Smith,  and  an 
adjoining  tract  of  the  same  depth,  and  eight  rods  wide,  was  sold  and 
conveyed  to  Mrs.  Julia  S.  B.  Smith,  wife  of  said  J.  M.  Smith;  and 
the  whole  was  thereafter  known  as  "Smith's  ten  acres,"  and  was  de- 
scribed as  ten  acres  in  the  assessment  roll.  In  March,  1860,  the 
tract  first  mentioned  was  sold  for  $19.36,  and  conveyed  to  Charles 
S.  Roe.  In  1861,  the  assessors  of  said  city  went  upon  the  tract 
belonging  to  Mrs.  Smith,  and  were  informed  by  Mr.  Smith  of  the 
sale  and  conveyance  of  the  other  tract  to  Roe,  and  had  the  boundary 
between  the  tracts  pointed  out  to  them,  and  were  requested  to  as- 
sess the  taxes  on  each  of  said  tracts  to  the  proper  person,  and  prom- 
ised so  to  do.  The  whole  ten  acres  were  again  listed,  however,  as 
a  single  tract,  and  the  name  of  J.  M.  Smith  put  opposite,  as  that 
of  the  owner.  This  fact  did  not  become  known  to  Mr.  or  Mrs. 
Smith  until  the  following  winter,  when  the  city  treasurer  refused 
to  receive  any  portion  of  the  taxes  charged  against  the  ten  acres 
unless  Smith  or  his  wife  would  pay  the  whole  thereof.  On  the  20tK 
of  January,  1862,  said  taxes  being  unpaid,  the  whole  ten  acres 
were  sold  for  the  same  to  the  city,  and  the  certificate  of  sale  assigned 
in  July  following  to  Charles  S.  Roe.  In  1864,  Mrs.  Smith  died, 
leaving  two  minor  children,  who  were  still  living  at  the  time  of  the 
filing  of  this  application.  On  the  10th  of  January,  1865,  Mr.  Smith 
applied  to  the  city  treasurer  for  the  purpose  of  redeeming  the  land" 
so  owned  by  Mrs.  Smith;  and  received  from  him  a  certificate  of  re- 
demption upon  paying  to  him  $6.88,  with  interest  and  fees.  After 
the  20th  of  January,  1865,  Roe  called  upon  the  city  clerk,  Willis- 
ton,  tendered  his  certificate  of  sale,  and  the  proper  fee,  etc.,  and 
demanded  a  deed  for  the  ten  acres,  which  was  refused  on  the  ground 
that  the  above  named  certificate  of  redemption  of  a  part  of  said 
land  had  been  filed  with  said  clerk.  The  application  was  for  .i 
mandamus  to  compel  the  issue  of  such  a  deed;  and  the  petitioner 
states,  inter  alia,  that  the  part  of  said  land  so  attempted  to  be  re- 
deemed, owing  to  the  improvement  existing  thereon  at  the  time  of 
the  levying  and  assessing  of  said  taxes  of  1861,  was  worth  more 


428          LISTING  OF  PERSONS  AND  VALUATION. 

than  two-thirds  of  the  value  of  the  whole  of  said  land;  that  there 
were  also  other  taxes  and  assessments  due  and  unpaid  upon  that 
part  of  the  land  at  the  time  of  such  alleged  redemption,  which  were 
not  then  paid;  and  insists  that  such  pretended  redemption  was  both 
illegal  and  inequitable. 

DOWNER,  J.  The  writ  of  mandamus  must  be  denied.  The  char- 
ter of  the  city  of  Janesville  provides,  in  substance  (see  sec.  15,  ch. 
3,  and  sec.  3,  ch.  7),  that  the  assessors  shall  be  governed  by  the 
provisions  of  law  relating  to  assessors  in  towns  in  making  out  the 
assessment  rolls,  so  far  as  they  are  not  inconsistent  with  the  charter. 
The  assessor  in  towns  was  at  the  time  of  the  assessment  in  question, 
and  still  is,  required  to  set  opposite  to  each  tract  of  land  in  the 
assessment  roll  the  name  of  the  owner,  if  known;  if  not  known,  the 
word  "unknown."  R.  S.  1858,  ch.  18  sees.  17  and  23;  Laws  of 
1859,  ch.  167,  sec.  23;  Laws  of  1860,  ch.  386,  sec.  23.  It  appears 
that  the  ten  acres  mentioned  in  the  petition  of  the  relator  belonged 
at  the  time  of  assessment  in  1861,  three  and  18-100  acres  to  Mrs. 
Smith,  and  the  remainder  to  Roe,  the  relator;  that  the  husband  of 
Mrs.  Smith  informed  the  assessor  what  portion  of  the  ten  acres 
was  owned  by  his  wife,  and  what  part  was  owned  by  Roe,  pointing 
out  to  him  the  division  line,  and  requesting  him  to  assess  the  same, 
each  part  separately  to  its  owner.  He  promised  so  to  do,  but  failed 
to  do  it,  and  assessed  the  whole  tract  together,  and  put  down  on  the 
roll  the  name  of  J.  M.  Smith  as  the  owner  of  the  whole.  Blackwelt 
on  Tax  Tit.  page  175,  says:  "When  it  is  shown  that  the  name  of 
the  original  owner  was  known  to  the  officer,  and  omitted,  the  list 
will  be  held  invalid;  because  the  statutes  expressly  declare  that  the 
name  of  the  owner  shall  be  inserted  when  it  can  be  done.  Where 
an  entire  tract  of  land  is  assessed  to  one  who  owns  only  a  portion 
of  it,  the  listing  is  illegal."  He  cites  Baker  v.  Blake.  36  Maine, 
433;  Proprietors  of  Cardigan  v.  Page,  6.  N.  H.,  182;  Nelson  v. 
Pierce,  id.,  194;  1  Foster,  400;  Merritt  v.  Thompson,  13  III,  716. 
We  do  not  see  why  the  assessment  roll  as  to  the  ten  acres,  and  all 
subsequent  proceedings,  are  not  void.  It  is  true,  there  is  in  the 
charter  provision  that  the  deed,  when  once  executed,  shall  be  con- 
clusive evidence  of  certain  facts  and  prima  facie  evidence  of  others. 
Should  we  compel  the  execution  of  the  deed,  the  purchaser  might  be 
protected,  or  at  least  be  in  a  better  position  than  he  is  now.  But 
courts  refuse  to  exercise  this  high  power  to  give  strength  and  valid- 
ity to  a  title  which  is  clearly  defective  on  the  merits.  The  People  v. 
The  Mayor,  etc.,  of  New  York,  10  Wend.,  393.  The  relator  holds 
a  tax  certificate  on  ten  acres  of  land,  of  which  he  now  owns  six 


CKUGEK  V.  DOUGHERTY.  429 

72-100  acres,  and  did  own  it  at  the  time  of  the  assessment  and  sale, 
and  on  which  he  ought  to  have  paid  the  taxes,  and  he  ought  also 
to  have  seen  that  it  was  properly  described  in  the  assessment  roll. 
He  now  demands  a  deed  of  the  whole  ten  acres,  and  refuses  the  re- 
demption money  paid  by  the  owner  of  the  smaller  portion,  and  main- 
tains that  she  could  not,  under  the  provisions  of  the  city  charter, 
redeem  a  part,  but  must  redeem  the  whole  ten  acres,  if  any.  He 
has  neither  a  legal  nor  an  equitable  right  to  such  a  deed. 

By  the  Court. — The  motion  for  a  peremptory  writ  of  mandamus 
is  denied,  with  costs  against  the  relator. 

A  motion  for  a  rehearing  in  this  cause  was  denied  at  the  Janu- 
ary term.  1866. 


CRUGER  V.  DOUGHERTY. 

Court  of  Appeals  of  New  York.    November,  1870. 
43  New  York,  107. 

Appeal  from  a  judgment  of  the  late  General  Term  of  the  Su- 
preme Court  in  the  sixth  judicial  district,  affirming  judgment  on 
a  verdict  directed  for  the  plaintiff  at  the  circuit. 

By  the  Court — PECKHAM,  J The  point  is  presented. 

whether  this  alleged  tax  sale  was  void,  by  reason  of  failure  to  com- 
ply with  the  directions  of  the  statute  in  imposing  the  tax,  and  iu 
the  proceedings  thereafter. 

The  statute  authorizing  this  tax,  makes  it  "the  duty  of  the  as- 
sessors of  each  ward  and  town,  while  engaged  in  ascertaining  the 
taxable  property  therein,  by  diligent  inquiry,  to  ascertain  the 
amount  of  rents  reserved  in  any  leases  in  fee,  or  for  one  or  more 
lives,  for  a  term  of  years,  exceeding  twenty-one  years,  and  charge- 
able upon  lands  within  such  town  or  ward,  which  rents  shall  be  as- 
sessed to  the  person  or  persons,  entitled  to  receive  the  same,  as  per- 
sonal estate,  which  it  is  hereby  declared  to  be,  for  the  purpose  of 
taxation  under  this  act."  (S.  L.,  1846,  p.  466,  §  1.) 

The  second  section  requires  the  board  of  supervisors  to  assess 
such  taxes  "upon  the  person  or  persons,  entitled  to  receive  such 
rents  within  the  town  or  ward,  where  the  lands  upon  which  such 
rents  are  reserved,  are  situated,  in  the  same  manner  and  to  the 
same  extent  as  any  personal  estate  of  the  inhabitants  of  such  town." 

In  a^e>sing  the  tax,  under  which  this  lot  was  sold  by  the  sheriff, 


430          LISTING  OF  PERSONS  AND  VALUATION. 

the  assessors  put  it  down  in  their  roll  as  follows:  "The  Kortright 
patent,  John  Kortright  and  others  legal  heirs  of  John  Kortright, 
late  of  the  city  of  New  York,  deceased,  or  their  heirs  or  assigns, 
for  rent  reserved  in  the  town  of  Kortright,  in  the  county  of  Dela- 
ware, subject  to  taxation,  estimated  at  a  principal  sum,  which  at  a 
legal  rate  of  interest  will  produce  an  income  equal  in  amount  to 
such  rents.  $26,195;  $632.41,  personal." 

,  The  first  objection  to  these  taxes  is,  that  the  assessors  have  not 
"assessed  them  upon  the  person  or  persons  entitled  to  receive  them/' 
as  they  are  required  to  do  by  the  statute. 

The  assessment  must  be  made  in  this  case  upon  these  persons, 
"in  the  same  manner,  and  to  the  same  extent  ^as  any  personal  estate 
of  the  inhabitants  of  such  town." 

The  statute  as  to  assessment  for  personal  estate  requires  the  name 
of  the  person  taxed  to  be  put  down  in  the  roll  in  one  column,  and 
the  full  value  of  his  personal  property  in  another.  (1  R.  S.  390,  § 
9.)  It  is  not  denied  that  the  names  should  be  put  down,  but  it  is 
insisted  that  they  were  sufficiently  inserted  on  the  tax  roll.  The 
statute  in  this  particular  must  be  substantially  complied  with.  Its 
entire  omission  would  be  fatal  to  the  validity  of  the  tax. 

Where  the  assessment  of  a  tax  for  land  was  made  against  a  per- 
son neither  "owner  or  occupant"  of  the  land  as  required  by  the 
statute,  the  assessment  has  been  held  to  be  absolutely  void.  (Whit- 
ney v.  Thomas,  23  N.  Y.,  281,  at  284.)  This,  it  must  be  remem- 
bered, is  an  assessment  for  personal  property  against  these  parties. 

Is  the  statement  made  here  any  better  than  if  none  had  been 
made  as  to  the  names  of  the  persons  assessed?  Only  one  person  is 
named  in  the  assessment  roll,  "John  Kortright,"  and  he  had  been 
dead  five  years  before  this  assessment  was  made.  He  was  a  son  of 
John  Kortright,  once  owner  of  the  patent,  who  died  in  1810. 

It  cannot  be  pretended  that  this  was  sufficient  to  name  him  who 
had  been  dead  five  years.  The  other  designations  are  mere  alter- 
native classes.  "Other  legal  heirs  of  John  Kortright,  deceased,  or 
their  heirs  or  assigns." 

It  is  said  that  the  assessors  acted  judicially,  and  that  this  may 
be  likened  to  a  judgment.  Such  a  judgment  against  one  of  these 
classes  would  scarcely  be  claimed  to  be  valid,  especially  a  judgment 
entered  without  process  or  notice  to  any  one. 

It  is,  perhaps,  not  necessary  to  say,  that  the  persons  should  lit- 
erally be  named  in  all  cases;  but  they  clearly  should  be  as  distinctly 
identified,  as  if  named. 


CKUGEK  V.  DOUGHEKTY.  431 

In  Wheeler  v.  Anthony  (10  Wend.,  346),  it  was  held  that  a  dis- 
trict school  tax  assessed  upon  "the  widow  and  heirs  of  Zopher  S. 
Wheeler,  deceased,"  imposed  upon  them  as  owners  and  occupants  of 
a  farm,  was  properly  imposed  in  that  form.  It  was  said  by  the 
court  in  that  case,  that  "when  property  is  owned  by  a-  single  indi- 
vidual, it  is  proper  and  necessary  that  the  name  of  such  individual 
should  be  inserted  in  the  tax  bill;  but  when  a  farm  is  owned  or  pos- 
sessed by  a  mercantile  or  other  firm,  the  assessment  to  such  firm 
would  answer  the  same  purpose  as  well  as  writing  out  each  name." 

If  this  were  true,  in  that  case,  as  to  such  a  tax  for  a  farm,  a  tax 
can  scarcely  be  imposed  for  personal  property  against  tenants  in 
common  in  any  such  form,  as  the  staute  authorizes  no  such  tax. 

If  tenants  in  common  of  personal  property  were  taxed  as  a  body 
for  so  much  personality,  it  would  afford  no  opportunity  to  any  one 
of  them  to  swear  it  off  on  account  of  debts  that  he  might  owe. 

The  statute  says  that  the  roll  must  state,  first,  "the  names  of  alt 
the  taxable  inhabitants,  and  fourth,  the  full  value  of  the  personal 
property  owned  by  such  person,  after  deducting  the  just  debts  ow- 
ing by  him."  (1  R.  S.,  390,  §  9.) 

Such  a  taxation  to  a  body  of  tenants  in  common  complies  with 
neither  of  these  provisions,  and  affords  no  opportunity  to  an  indi- 
vidual to  have  his  tax  corrected.  A  firm  is  not  a  person,  like  * 
corporation.  Hence  the  tax  as  to  personal  property  should  be  upon 
each  individual,  including  his  interest  in  the  firm,  as  in  all  other 
taxable  personal  property.  But  if  the  tax  be  valid  upon  a  firm,  it 
does  not  follow  that  it  would  be  valid  when  imposed  upon  a  body 
of  tenants  in  common,  in  personality,  as  a  body. 

It  is  also  urged  that  these  persons  are  estopped  from  questioning 
this  tax  now,  because  they  have  been  assessed  in  this  form  for  eight- 
een years  prior  to  this  assessment,  and  have  always  paid  it. 

The  payment  of  a  tax  for  any  number  of  years  without  legal  pro- 
ceedings, will  not  give  validity  to  such  proceedings  when  they  are 
questioned,  if  taken  without  authority  of  law.  One  might  almost 
as  well  defend  an  action  for  an  assault  and  battery,  by  pleading 
that  he  had  beaten  the  plaintiff  every  year  for  many  years,  and 
that  this  was  the  first  time  the  plaintiff  had  ever  complained. 

The  county  treasurer  seemed  to  think  the  assessment  illegal,  and 
in  issuing  his  warrant,  he  cut  off  two  classes  named  in  the  assess- 
ment, and  issued  it  against  the  only  person  named,  who.  had  been 
dead  for  years,  and  others,  heirs,  etc. 


432          LISTING  OF  PEKSONS  AND  VALUATION. 

If  the  assessment  were  void,  the  county  treasurer  could  scarcely 
make  it  valid  by  his  warrant. 

It  is  insisted  that  the  assessors,  in  making  this  assessment,  acted 
judicially;  that  they  had  jurisdiction  of  the  subject-matter,  tin.- 
rents,  and  of  the  persons  entitled  to  receive  them,  and  although 
they  committed  errors,  yet  their  action  was  not  void,  but  only  void- 
able. The  liability  of  assessors  is  not  here  in  question,  and  it  is 
perhaps  not  necessary  to  discuss  it. 

But,  if  the  purchaser,  in  this  case,  were  a  defendant  claiming  to 
hold  this  property  under  these  proceedings,  he  would  fail.  He 
would  fail  even  upon  the  ground  assumed  by  the  defense. 

Surely  it  will  not  do  to  say,  that  because  there  are  rents  reserved 
in  the  town,  and  they  are  receivable  by  some  one,  therefore  what- 
\P  •  ever  the  assessors  may  do  in  relation  to  an  assessment  in  such  case 
is  valid,  whether  it  be  in  substantial  compliance  with  the  statute  or 
not.     The  assessment  must  be  made  to  some  one.     It  is  not  suffi- 
,  Vj^ient  to  say  generally  to  the  persons  entitled  to  receive  the  rents. 
V$        They  must  be  named  and  indicated.     Until  that  is  done,  the  asses- 
sors have  passed  no  specific  judgment,  have  really  exercised  no  juris- 
diction. 

It  is  a  rule  well  established  by  authority,  that  when  one  claims  to 
hold  another's  property  under  statutory  proceedings,  as  under  a 
sale  for  taxes,  he  must  show  that  every  material  provision  designed 
for  the  security  of  the  persons  taxed,  or  their  protection,  has  been 
substantially  complied  with,  otherwise  the  claim  will  fail.  In  fact 
the  rule  is  generally  laid  down  with  much  more  strictness. 

For  the  reasons  above  stated,  we  think  the  purchaser  under  this 
assessment  took  no  title. 

There  are  other  defects  insisted  upon  not  deemed  necessary  to 
consider. 

The  judgment  is  affirmed. 

All  the  judges  concurring  judgment  affirmed. 

An  assessment  of  land  in  the  alternative  as  "'to  unknown  owners  and  to 
all  owners  and  claimants  known  and  unknown"  is  void.  Brady  v.  Dowden  59 
Cal.  51 ;  Shimmin  v.  Inman  26  Me.  228.  But  where  an  assessment  to  unknown 
owners  is  permitted  by  the  statute  if  an  assessment,  is  thus  made  it  will  be 
presumed  that  the  name  of  the  owner  is  unknown  to  the  assessors.  Himmell- 
mann  v.  Steiner  38  Cal.  178.  The  assessor  is  not  obliged  to  determine  the 
ownership.  Hughes  v.  Reis,  40  Cal.  261.  In  New  York  land  may  be  assessed 
to  the  owner  or  occupant.  Whitney  v.  Thomas  23  N.  Y.'  285. 


VAN  VOORHIS  V.  BUDD.  433 


VAN  VOORHIS  V.  BUDD. 

Supreme  Court  of  New  York  General  Term  May,  186S. 
39  Barb  our  479. 

Appeal  from  a  judgment  of  the  county  court  of  Dutchess  county, 
affirming  the  judgment  of  a  justice  of  the  peace.  The  plaintiff  sued 
to  recover  damages  for  the  seizure  and  sale  of  certain  personal  prop- 
erty; and  the  defendant  justified  the  taking,  as  town  collector,  un- 
der a  tax  warrant  issued  to  him  as  such.  The  plaintiff  recovered 
a  judgment  before  the  justice. 

By  the  Court,  BROWN,  J.  This  action  is  brought  against  the  de- 
fendant to  recover  damages  for  the  seizure  and  sale  of  a  horse,  the 
property  of  the  plaintiff.  The  defendant  justifies  under  a  tax  war- 
rant, issued  to  him  as  collector  of  the  town  of  Fishkill,  in  the  county 
of  Dutchess,  for  the  year  1861. 

The  tax  is  assessed  upon  the  roll  to  Henry  D.  Van  Voorhis,  while 
the  real  name  of  the  plaintiff  is  William  H.  Van  Voorhis.  The 
proof  upon  the  trial,  however,  showed  that  the  plaintiff  was  also 
known  in  the  town  as  Henry  Van  Voorhis,  and  he  was  the  person 
intended  to  be  charged  with  the  payment  of  the  tax.  Levi  S.  Van 
Kleek,  a  witness  for  the  defendant,  testified  that  he  was  one  of  the 
assessors  of  the  town  of  Fishkill  during  the  year  1861,  and  made 
the  assessment  against  the  plaintiff  to  Henry  D.  Van  Voorhis.  He 
saw  him  and  spoke  to  him  about  the  assessment,  and  knew  him  by 
the  name  of  Henry  Van  Voorhis.  His  name  was  upon  the  assess- 
ment roll  for  the  year  previous  as  Henry  D.  Van  Voorhis,  and  the 
witness  took  the  name  from  that  roll.  The  plaintiff  himself  was 
examined  as  a  witness,  and  said  he  was  more  frequently  called  Hen- 
ry than  William  Henry  Van  Voorhis. 

The  assessors  are,  by  diligent  inquiry,  to  be  made  between  certain 
times  named  in  the  statute,  to  ascertain  the  names  of  all  the  taxa- 
ble inhabitants  in  their  respective  towns  or  wards,  and  also  all  the 
taxable  property  real  or  personal  within  the  same,  and  from  these 
they  are  to  prepare  the  assessment  rolls  in  the  manner  prescribed. 
When  the  collector  receives  the  tax  warrant  he  is  required  to  call 
at  least  once  upon  the  person  taxed  and  demand  payment  of  the 
tax  charged  to  him  on  his  property.  If  the  person  refuse  or  neglect 
to  make  payment  the  collector  shall  levy  the  same  by  distress  and 
sale  of  the  goods  and  chattels  of  the  person  who  ought  to  pay  the 
same.  It  is  evident  that  this  law  cannot  be  executed  as  to  the  names 
of  persons  charged  with  the  payment  of  taxes  with  the  same  pre- 
28 


434          LISTING  OF  PEKSOXS  AND   VALUATION. 

cision  and  exactness  formerly  observed  in  regard  to  the  names  of 
persons  made  parties  defendants  in  actions  at  law.  In  these  latter 
proceedings,  when  the  defendant  pleaded  his  misnomer  in  abate- 
ment he  was  bound  to  furnish  the  plaintiff  with  his  real  name  and 
swear  to  the  truth  of  the  plea,  and  the  plaintiff  might  have  leave  to 
amend  his  declaration  or  institute  a  new  action,  and  the  remedy  as 
well  as  the  right  of  action  was  preserved  to  him^  notwithstanding 
the  error  in  the  defendant's  name.  In  the  assessment  of  a  tax  no 
such  result  would  ensue.  The  statute  provides  no  other  means  than 
the  diligence  and  inquiries  of  the  assessors  to  ascertain  the  real 
names  of  the  tax  payers;  and  if  an  error  is  made  it  is  fatal  to  the 
recovery  of  the  tax.  Reasonable  certainty  •  then  is  all  that  can  or 
should  be  required.  If  the  party  defendant  was  as  well  known  by 
the  name  given  in  the  declaration  as  by  his  baptismal  name,  that 
was  regarded  as  a  good  replication  to  a  plea  of  misnomer  in  abate- 
ment. And  so  in  the  assessment  of  the  tax  in  question,  if  the  plain- 
tiff was  known  by  the  name  of  Henry  Van  Voorhis,  that  was  a  suffi- 
cient justification  for  charging  him  with  the  payment  of  his  share 
of  the  public  taxes  by  that  name.  This  court  has  held,  in  the  case 
of  Wheeler  v.  Anthony,  (10  Wend.  346,)  that  a  tax  assessed  to  the 
widow  and  heirs  of  Zophar  S.  Wheeler  deceased,  when  they  actually 
owned  and  occupied  the  farm  charged,  was  a  sufficient  compliance 
with  the  directions  of  the  statute  to  justify  the  collector  in  execut- 
ing the  warrant  by  the  seizure  and  sale  of  a  cow  to  satisfy  the  tax. 
In  respect  to  the  presence  of  the  letter  D.  between  the  words  Henry 
and  Van  Voorhis  upon  the  tax  roll,  it  is  to  be  regarded  as  sur- 
plusage, upon  the  well  known  rule  that  the  law  recognizes  but  one 
Christian  name.  (See  Franklin  and  others  v.  Talmadge,  5  Johns. 
84;  Rosevelt  v.  Gardner,  2  Cowen  463.)  There  was  no  proof 
offered  upon  the  trial  to  show  that  there  was  any  other  person  in 
the  town  of  Fishkill  known  by  the  name  of  Henry  Van  Voorhis,  or 
Henry  D.  Van  Voorhis,  to  whom  the  charge  might  have  been  re- 
ferred; so  that  there  could  be  no  confusion  and  no  uncertainty  in 
regard  to  the  person  whose  duty  it  was  to  pay  the  tax. 

The  judgments  in  the  justice's  and  in  the  county  court  should  be 
reversed,  with  costs. 

Initials  also,  if  identical  with  those  of  the  owner  of  the  property,  are  suf- 
ficient and  the  Christian  name  need  not  be  used.  Douglass  v.  Daken  46  Cal.  51. 

In  case  of  corporations  the  strictness  of  the  rule  as  to  name  is  not  so 
great.  People  v.  Sierra  Buttes  Quartz  (Mining)  Co.,  39  Cal.  511;  Farns- 
worth  (Mfg.)  Co.  v.  Rand  65  Me.  22. 


TYLEE  V.  INHABITANTS  OF  HAKDWICK  435 


TYLER  V.  INHABITANTS  OF  HARDWICK. 

Supreme  Judicial  Court  of  Massachusetts,  October,  181$. 
6  Metcalf  470. 

SHAW,  C.  J.  This  action  is  brought  to  recover  back  money  al- 
leged to  have  been  paid  under  compulsion,  as  a  town  tax.  The  ob- 
jection is,  that  the  plaintiff's  Christian  name  was  not  inserted  in  the 
valuation,  nor  in  the  list  and  warrant  committed  to  the  collector, 
but  only  hie  surname  of  Tyler. 

The  question  arising  from  the  facts  in  the  case  is,  whether  tho 
plaintiff  was  rightfully  required  by  the  collector  to  pay  the  tax,  or 
whether,  as  a  tax  unlawfully  levied,  he  was  wrongfully  required  to 
pay  it,  and  can  recover  it  back  in  this  action. 

Whilst,  on  the  one  hand,  it  is  important  to  the  security  of  the 
citizen,  that  as  much  regularity  and  uniformity  as  is  practicable 
should  be  maintained  in  the  system  of  direct  taxation,  and  many 
laws  directory  to  the  public  officers  have  been  framed  with  a  view 
to  the  attainment  of  that  object;  it  is  also  important  that,  as  far 
as  practicable,  all  persons  liable  to  taxation  should  pay  their  just 
proportion  of  the  public  charges,  and  not  escape  by  means  of  slight 
mistakes  and  frivolous  objections. 

One  of  the  statutes,  to  which  we  have  been  referred,  is  designed 
to  promote  this  object,  by  providing  that  a  tax  shall  not  be  avoided 
by  an  error  or  mistake  in  the  name,  if  in  fact  the  party  whose  name 
was  mistaken  be  liable  to  taxation,  and  was  the  person  intended  by 
the  assessors  to  be  taxed.  Rev.  St.  c.  8,  §  5.  The  provision  is  this: 
"If, -in  the  assessors'  lists,  or  in  their  warrant  and  list  committed  to 
the  collectors,  there  shall  be  any  error  in  the  name  of  any  person 
taxed,  the  tax  assessed  to  him  may,  notwithstanding  such  error,  be 
collected  of  the  person  intended  to  be  taxed,  provided  he  is  taxable, 
and  can  be  identified  by  the  assessors." 

The  only  question  then  is,  whether  this  clause  was  intended  to 
apply  to  a  case  where  the  error  in  the  name  exists  as  well  in  the 
valuation  as  in  the  assessors'  warrant  to  the  collector. 

It  was  argued,  that  all  which  was  intended  is,  that  when  the  name 
'  is  right  in  the  valuation,  but  erroneously  transcribed  into  the  war- 
rant, the  tax  shall  not  be  avoided,  as  the  warrant  can  be  corrected 
by  the  valuation.  But  we  think  the  statute  was  intended  to  go 
much  farther,  and  to  provide  for  a  mistake  in  both.  The  words 
"assessor's  lists,"  in  this  clause,  stand  for  the  valuation,  and  "their 
warrant  and  list"  are  described  as  that  which  is  "committed  to  the 


436          LISTING  OF  PERSONS  AND  VALUATION. 

collectors."  The  statute  is  plain  and  explicit,  and  covers  all  cases 
of  error  in  the  name,  and  was  intended,  we  think,  to  apply  to  a 
case  where  the  name  is  mistaken  by  omitting,  as  well  as  by  adding 
or  by  misnaming.  The  only  things  required  are,  that  the  person 
shall  be  liable  to  taxation,  and  be  in  fact  the  person  intended  to  be 
taxed  under  such  designation.  .  .  .  These  facts  must  of  neces- 
sity be  proved  by  evidence  aliunde.  The  fact  of  the  identity  of 
the  party,  and  the  intention  of  the  assessors,  must  in  general  be 
proved  by  them. 

Such  seems  to  us  to  be  the  true  construction  of  the  statute;  and 
though  it  may  sometimes  lead  to  consequences,  operating  hardly 
upon  individuals,  it  will  be  attended  practically  with  little  danger, 
and  with  less  evil  than  the  escape  of  persons  from  paying  a  just 
share  of  the  tax,  on  account  of  formal  errors  and  mistakes.  It  is 
not  to  be  overlooked  that  such  errors  will,  in  most  cases,  arise  from 
the  default  of  the  tax-paying  inhabitant  himself,  who  fails  to  per- 
form the  duty,  required  by  law,  of  giving  in  his  name  and  list  to 
the  assessors. 

Upon  this  view  of  the  statute,  the  court  are  of  opinion,  that  the 
evidence  should  have  been  received,  and  that  notwithstanding  the 
alleged  error  in  not  inserting  the  plaintiff's  Christian  name,  he  was 
liable  to  the  tax,  and  compellable  to  pay  it,  if  the  facts  were  proved, 
the  evidence  of  which  was  offered;  and  therefore,  that  the  verdict 
must  be  set  aside,  and  a  new  trial  had. 

But  where  there  is  no  such  statute,  assessment  to  sutfia^e  alone  is  not 
good.    Crawford  v.  Schmidt,  47  CaT.  617. 


VII.    ASSESSMENT  or  SEPARATE  PARCELS. 
COUNTY  COMMISSIONERS  V.  UNION  MINING  CO. 

Court  of  Appeals  of  Maryland.     October,  188S. 
61  Maryland  547. 

STONE,  J.,  delivered  the  opinion  of  the  court. 

The  bill  in  this  case  is  for  an  injunction  to  restrain  the  County 
Commissioners  of  Allegany  County  and  the  tax  collector  from 
selling  the  property  of  the  appellee,  who  insists  that  a  portion  of  the 
tax  levied  upon  its  property  is  illegal  and  void.  A  preliminary  in- 
junction was  granted  by  the  Court  below,  and  from  this  order  an 
appeal  has  been  taken. 


COUNTY  COMMISSIONERS  V.  UNION  MINING  CO.  437 

The  appellee  assigns  several  reasons  why  the  assessment  is  illegal 
and  void. 

1st.  Because  the  property  of  the  appellee  so  taxed,  consists  of 
several  tracts  of  non-adjoining  land  lying  in  different  parts  of  the 
county,  and  known  by  distinctive  names,  but  the  appellee  was  taxed 
for  a  number  of  acres  in  gross,  without  giving  the  name  or  num- 
ber of  acres  in  any  one  tract. 

The  County  Commissioners  have  the  exclusive  power  to  levy  and 
collect  taxes,  and  in  some  cases  to  value  and  assess  property  in  the 
manner  pointed  out  by  law.  While  they  constitute  a  tribunal  with 
special  and  limited  statutory  powers,  yet  acting  within  the  scope  of 
such  powers  their  action  is  conclusive,  and  cannot  be  reviewed  by 
a  Court  of  Equity.  The  collection  of  taxes  will  not  be  interfered 
with  or  restrained  by  a  Court  of  Equity  for  mere  irregularities  in 
their  proceedings,  or  for  any  hardship  that  may  result  from  their 
collection.  It  is  only  when  the  tax  itself  is  clearly  illegal,  or  the 
tribunal  imposing  it  has  clearly  exceeded  its  powers,  or  the  rights 
of  the  tax-payers  have  been  violated,  that  the  interposition  of  the 
special  remedy  by  injunction  can  be  successfully  invoked,  -and  only 
then  when  no  appellate  tribunal  has  been  created  with  power  to 
remedy  the  wrong.  The  bill  in  this  case  is  a  long  one,  and  rather 
argumentative  than  specific  in  some  of  its  statements. 

But  there  are  some  objections  urged  by  the  appellee  that  require 
a  more  extended  notice.  One  of  these  is  the  fact  alleged  in  the  bill 
that  the  lands  of  the  appellee  consisted  of  half  a  dozen  or  more  sep- 
arate and  distinct  tracts  of  land,  each  having  a  well  known  name, 
and  lying  in  different  parts  of  the  county,  and  having  different  val- 
ues, while  the  only  assessment  made  is  upon  4245  acres  of  land 
which  is  valued  at  $10  per  acre,  making  the  whole  valuation  $42,- 
450.  This  raises  the  question  whether  the  law  imposes  upon  the 
Commissioners  the  duty  of  assessing  each  tract  separately,  and 
whether  a  failure  so  to  do  is  such  an  infringement  of  the  rights  of 
the  appellee,  as  he  is  entitled  to  have  redressed  by  a  Court  of 
Equity. 

The  lands  of  the  appellee  wore  required  to  be  valued  and  assessed 
under  the  general  assessment  law  of  1876.  and  we  must  presume 
that  they  were  assessed  and  returned  to  the  Commissioners  accord- 
ing to  law.  No  taxes  however  were  then  paid  upon  these  lands,  but 
the  i-toc-k  of  the  corporation  representing  all  its  property,  and  in- 
cluding these  lands  were  taxed.  The  Act  of  1878,  chap.  178,  altered 


438          LISTING  OF  PERSONS  AND  VALUATION. 

the  law  in  that  respect,  and  made  the  lands  of  this  and  other  cor- 
porations, liable  to  direct  taxation.  That  Act  provided  that  the 
president  or  other  proper  officer  of  any  corporation,  that  might  own 
real  property,  should  furnish  to  the  County  Commissioners  "a  true 
statement  of  such  real  property  situate  or  located  in  such  county; 
and  such  real  property  shall  be  valued  and  assessed  by  said  County 
Commissioners  to  the  incorporated  institution  owning  the  same." 

This  appears  to  have  been  done,  and  the  County  Commissioners 
of  Allegany  proceeded  to  value  and  assess  the  real  estate  of  the 
appellee. 

It  will  be  seen  from  this  Act,  that  the  president  or  other  proper 
officer  is  required  to  furnish  a  true  statement  of  the  real  property, 
and  the  Commissioners  are  then  to  value  and  assess  it.  If  the  ap- 
pellee furnished  the  statement  of  its  lands,  that  is  now  found  on 
the  books  of  the  Commissioners,  and  which  has  been  before  re- 
ferred to,  then  the  appellee  cannot  complain  of  the  assessment  in 
gross.  If  the  president  of  the  appellee  corporation  merely  described 
the  lands  as  4245  acres  of  land,  in  the  statement  he  furnished  the 
commissioners,  then  the  appellee  is  estopped  from  saying  that  the 
assessment  is  improper  and  void,  because  such  assessment  is  the  con- 
sequence of  its  own  act.  But  if  the  president  did  furnish  in  detail 
a  proper  statement,  showing  the  names,  number  of  acres,  and  loca- 
tion of  the  several  tracts,  then  it  was  manifest  error  in  the  Commis- 
sioners to  change  it,  and  make  the  assessment  that  they  did. 

It  is  true  that  the  Act  of  1878,  ch.  178,  does  not  prescribe  any 
particular  mode  of  assessment,  but  being  in  po/ri  materia  with  the 
Act  of  1876,  ch.  260,  the  general  assessment  law,  they  should  be 
taken  together,  and  we  may  conclude  that  the  Legislature  intended 
that  the  rules  they  had  laid  down  for  the  assessment  of  all  the  real 
property  should  be  observed,  when  the  County  Commissioners  werr 
called  upon  to  re-assess  a  part  of  it. 

The  Act  of  1876,  ch.  260,  sec.  17,  the  general  assessment  law, 
points  out,  with  great  particularity,  the  mode  and  the  manner  of 
assessing  real  estate.  It  says:  "In  valuing  real  estate  in  any  county 
in  this  State,  except  in  a  city  in  such  county,  the  assessors  shall 
specify  so  far  as  may  be  practicable,  the  name  or  names  of  the  tracts 
or  parcels  of  land  so  valued  and  the  number  of  acres  or  quantity  in 
each,  and  the  value  per  acre." 

There  are  many  obvious  reasons  why  this  particularity  is  required. 
The  owner  of  several  tracts  of  land,  lying  in  different  localities, 
and  of  different  values,  is  entitled  to  the  judgment  of  the  assessors 
in  the  first  instance,  and  of  the  County  Commissioners,  if  they  alter 


COUNTY  COMMISSIONERS  V.  UNION  MINING  CO.    439 

the  first  assessment,  of  the  value  of  each  tract  separately.  It  is  a 
valuable  and  important  right  to  the  owner,  as  it  enables  him  to  com- 
pare the  taxation  of  his  own  with  adjoining  property,  and  see  that 
no  injustice  is  done  him  by  overestimates. 

The  community  is  also  entitled  to  this  knowledge,  which  is  often 
an  important  factor  in  the  sale  and  transfer  of  real  estate.  The  law 
recognizes  this  right  very  distinctly  in  sec.  22  of  Art.  11  of  the 
Revised  Code,  that  expressly  requires  the  clerk  of  the  County  Com- 
missioners to  keep  an  accurate  account  of  all  property,  and  the  val- 
uation thereof,  which  shall  be  open  to  inspection  by  the  public, 
without  fee  or  reward. 

If  we  examine  the  Act  as  to  real  property  in  a  city,  we  find  still 
greater  particularity  required.  The  number  of  front  feet,  the  depth 
of  the  lot,  the  street  upon  which  it  lies,  and  if  a  house  is  upon  the 
lot,  even  the  number  of  the  house  is  required. 

If  in  the  face  of  all  this  particularity  the  County  Commissioners 
undertake  to  average  the  value  of  half  a  dozen  different  tracts  of 
land,  lying  in  widely  differing  localities,  they  violate  the  mode  and 
manner  of  the  assessment  required  by  law. 

It  is  no  answer  for  the  Commissioners  to  say,  that  the  amount  of 
tax  that  the  owner  has  to  pay  is  not  increased  by  the  mode  of  aver- 
age that  they  have  adopted,  and  that  he  would  have  to  pay  the  same 
tax  if  each  tract  were  re-valued  separately.  It  is  the  absolute  right 
of  the  owner  to  have  them  taxed  separately,  and  this  lumping  re- 
assessment is  a  direct  violation  of  that  right. 

Judge  Cooley  says:  "When  two  parcels  are  owned  by  the  same 
person,  if  the  statute  requires  a  separate  assessment,  obedience  to  the 
requirement  is  essential  to  the  validity  of  the  proceedings.  It  can- 
not be  held  in  any  case  that  it  is  unimportant  to  the  tax-payer 
whether  this  requirement  is  complied  with  or  not.  Indeed,  it  is 
made  solely  for  his  benefit;  it  being  wholly  immaterial,  so  far  as 
the  interest  of  the  State  is  concerned,  whether  separate  estates  are  or 
are  not  separately  assessed.  And  where  a  requirement  has  for  its  sole 
object  the  benefit  of  the  tax-payer,  the  necessity  of  a  compliance 
with  it  cannot  be  made  to  depend  upon  the  circumstances  of  a  par- 
ticular case,  and  the  opinion  of  a  court  or  jury  regarding  the  im- 
portance of  obedience  to  it  in  that  instance.  That  method  of  con- 
struing statutes  would  abolish  all  certainty."  Cooley  on  Taxation, 
280. 

As  we  have  said  before,  we  think  the  power  to  assess  given  by 
the  Act  of  1878  to  the  Commissioners,  means  an  assessment  such 


440          LISTING  OF  PERSONS  AND  VALUATION. 

as  was  prescribed  by  the  Act  of  1876,  and  it  was  clearly  an  error 
in  the  Commissioners  to  assess  it  in  a  different  manner. 

We  are  strengthened  in  this  view  by  the  fact  that  the  Act  of 
1ST8,  ch.  178,  sec.  150,  gives  the  County  Commissioners  the  power 
annually  to  correct  any  assessment.  That  section  enacts : 

"And  if  the  real  estate  or  other  property  shall,  from  any  cause, 
have  increased  or  diminished  largely  and  materially  in  value  since 
the  last  levy,  they  shall  correct,  alter,  and  amend  the  assessment  of 
the  same,  so  as  to  conform  to  its  present  value." 

The  true  construction  of  this  section  is  that  it  gives  the  Com- 
missioners the  power  to  alter  the  assessment  as  made  by  the  asses- 
sors, if  in  their  judgment  it  had  largely  increased  or  diminished. 
It  does  not  authorize  them  to  change  the  mode  and  manner  in  which 
the  property  was  required  by  law  to  be  assessed. 

But  as  the  bill  leaves  it  in  doubt  whether  the  real  estate  of  the 
appellee  was  assessed  in  gross,  by  the  act  of  the  appellee  in  furnish- 
ing the  statement,  we  cannot  make  a  decisive  order  on  that  point. 

Where  land  is  platted  as  city  lots,  assessment  by  the  acre  as  before  is 
bad.  Grace  v.  McBee,  23  Kan.  379.  See  Jennings  v.  Collins,  99  Mass.  29, 
as  to  what  is  a  parcel,  where  it  is  held  that  mere  division  by  owner  for  pur- 
poses of  sale  will  not  make  assessment  of  such  parcels  necessary. 


BROWN  V.  HAYS. 

Supreme  Court  of  Pennsylvania.     October,  1870. 
66  Pennsylvania  State  229. 

AGNEW,  J. — This  case  has  leading  features  which,  being  deter- 
mined, will  render  it  unnecessary  to  consider  the  assignments  of 
error  in  detail.  The  first  and  most  important  fact  which,  to  a  great 
extent,  rules  the  case  is,  that  lot  No.  4023  of  1026  acres  is  one  tract 
of  land,  and  belongs  to  a  single  ownership.  It  all  lies  in  Polk  town- 
ship, except  an  insignificant  parcel  caused  by  a  slight  deviation  from 
the  northern  Boundary  of  the  tract  in  running  the  line  of  Polk 
township,  leaving  16  acres  in  a  narrow  triangle  lying  within  the 
township  of  Heath.  Until  1859  it  had  all  been  assessed  and  taxed 
in  Polk  township,  and  Hays,  the  plaintiff,  had  paid  the  taxes  ac- 
cordingly. In  1859  the  assessment  was  returned  originally  as  1026 
acres  in  Polk  township;  but  by  some  action  of  the  county  commis- 


BROWN   V.  HAYS.  441 

sioners  not   clearly   explained,  the  assessment  had  been   altered  to 
726  acres  in  that  township.     In  the  same  year  the  duplicate  and 
supervisors'   return   for   Heath   township  exhibits  an  assessment  of 
300  acres  of  No.  4023  in  Heath  township.     It  was  on  this  return 
the  treasurer's  sale  took  place  in  1860,  under  which  the  defendants 
claimed.     Joseph  Henderson,  the  clerk  of  the  commissioners,  is  una- 
ble to  state  at  whose  instance  the  change  from  1026  to  726  acres  in 
Polk  township  was  made — all  he  can  say  is,  he  thinks  it  was  on  the 
representation  of  the  assessor,  or  someone  else  in  whom  the  commis- 
sioners had  confidence.     The  strong  probability  is,  it  was  caused  by 
the   incorrect,   indeed   false  assessment  made   for  Heath   township; 
and  unless  it  was  done  by  way  of  revision  by  the  board  of  assessors 
it  was  irregular.     If  the  testimony  of  Henderson,  the  clerk,  proves 
anything,  it  is  that  this  alteration  in  the  assessment  of  4023  in  Polk 
township  was  not  done  at  the  instance  of  the  board  of  revision;  for 
he  "don't  know  (he  says)  that  there  was  any  board  of  revision  about 
it."     The  2d  section  of  the  Act  of  3d  April  1804  directs  all  un- 
seated lands  "to  be  valued  and  appraised  as  other  property;  and 
both  the  8th  section  of  the  Act  of  1799  (3  Smith's  Laws  395),  and 
the  2d  and  4th  sections  of  the  revised  Act  of  15th  April  1834  com- 
mit to  the  proper  assessor  the  duty  of  taking  the  account,  and  mak- 
ing the  return  and  valuation  of  the  taxable  property  within  this 
township.     In  Respublica  v.  Deaves,  3  Yeates  465,  it  was  held  that 
under  the  Act  of  1799  the  valuation  of  the  assessors  is  binding  on 
the  county  commissioners;    and  by  a  parity  of  reason,  the  return  of 
a  tract  which  fixes  its  identity  and  liability  to  taxation  is  more  so. 
The  6th  section  of  the  Act  of  15th  April  1834  expressly  provides 
for  the  assembling  of  the  assessors,  on  a  day  to  be  appointed  by 
the  commissioners,  to  make  the  returns  of  the  several  assessments, 
when  it  shall  be  the  duty  of  the  assessors  to  point  out  errors,  and 
if  the  errors  be  established,  the  commissioners  shall  correct  the  re- 
turns accordingly. 

This  being  the  legal  system  for  the  correction  of  errors,  in  the  as- 
sessment, it  is  an  important  fact  that  in  consequence  of  Hays's  resi- 
dence in  a  remote  part  of  the  state,  and  his  paying  the  taxes  of  1859 
by  the  hand  of  another  not  familiar  with  his  lands,  he  had  no  notice 
of  the  assessment  in  Heath  township.  Having  always  before  paid 
his  taxes  for  his  lands  as  lying  in  Polk  township,  he  had  no  reason 
to  suppose  that  his  land  was  taxed  elsewhere.  His  payment  to  the 
treasurer  of  all  the  taxes  assessed  in  Polk  township  unquestionably 
operated  to  discharge  all  the  land  lying  in  that  township  from  sale. 
The  payment  was  for  the  taxes  of  lot  No.  4023  in  Polk  township 


442          LISTING  OF  PERSONS  AND  VALUATION. 

and  not  merely  for  726  acres  of  land.  The  assessment  was  made 
by  the  number  of  the  lot  and  also  in  the  name  of  the  original  war- 
antee;  indicating  clearly  the  intent  to  assess  the  lot  as  a  whole,  and 
as  a  single  ownership. 

•  •  •».... 

The  judgment  is  affirmed. 


WOODSIDE  V.  WILSON. 

Supreme  Court  of  Pennsylvania.     1858. 
32  Pennsylvania  State,  52. 

THOMPSON,  J. — A  sale  of  unseated  land  for  taxes,  which  have 
been  actually  assessed,  and  which  have  remained  due  and  unpaid 
"for  one  whole  year,"  will  pass  the  title,  although  assessed  in  a 
wrong  name  or  by  a  wrong  number,  if  otherwise  designated  and 
capable  of  identification.  The  reason  for  this  is,  the  recognized 
principle,  that  it  is  the  land  and  not  the  owner,  which  is  chargeable 
and  to  be  charged  with  the  tax.  It  must,  however,  be  susceptible  of 
identification,  as  the  land  assessed,  otherwise  the  sale  would  be  void. 
The  bond,  an  essential  part,  would,  without  any  designation,  be  in- 
valid, as  being  too  vague  to  furnish  a  lien  on  the  land,  and  thus 
the  sale  would  be  inoperative.  But,  identification  is  a  question, 
arising  on  the  evidence,  for  the  jury;  and  what  will  be  sufficient  to 
satisfy  them,  that  the  land  sold  was  the  land  charged  with  the  tax, 
will  support  the  sale.  This  is  conclusively  settled  in  Stewart  v. 
Shoenfelt.  13  S.  &  R.  360;  Strauch  v.  Shoemaker,  1  W.  &  S.  174; 
Burns  v.  Lyon,  4  W.  363;  Thompson  v.  Fisher,  6  W.  &  S.  520; 
Dunden  v.  Snodgrass,  6  Harris  151 ;  Russel  v.  Werntz,  12  Harris 
337;  Miller  v.  Hale,  2  Casey  436,  and  other  cases.  It  was  said  in 
Laird  v.  Heister,  12  Harris  463,  "that  the  tax-books  in  the  office 
of  the  commissioners,  and  treasurer,  were  not  intended  to  give  notice 
of  the  liability  of  the  land  for  taxes,  but  merely  the  mode  in  which 
tax  accounts  are  kept."  This  seems  a  perfectly  legitimate  conclu- 
sion, deducible  from  the  principle  asserted  in  Dunden  v.  Snodgrass, 
and  other  cases,  that  the  designation  of  the  land  will  be  sufficient,  if 
it  afford  the  means  of  identification,  and  do  not  positively  mislead 
the  owner.  It  will  not  do  to  assume  that  such  a  thing  may  not 
occur ;  but.  in  case  of  an  owner  anxious  and  willing  to  pay  his  taxes, 
it  is  difficult  to  conceive  of.  For  if,  when  he  examines  the  assess- 


WOODSIDE  V.  WILSON.  443 

ment  books,  and  finds  that  the  description  or  designation  of  the  land 
is  defective, — so  much  so,  as  to  render  uncertain  or  doubtful  what 
is  really  the  assessment  of  the  land  sought  for,  he  can  relieve  him- 
self of  all  difficulty  on  that  score,  by  procuring  it  to  be  assessed  in 
the  office  of  the  commissioners,  by  a  proper  description;  and  then 
a  payment  of  the  tax  so  assessed,  relieves  the  land  from  all  danger. 
The  tax  being  thus  paid,  a  sale  by  any  other  description  will  amount 
to  nothing,  as  the  duty  is  discharged,  and  the  land,  for  the  time 
being,  free  from  any  charge. 

The  land  in  controversy  was  a  part  of  donation  tract  N"o.  152, 
8th  district.  The  plaintiff  below  claimed  it  by  virtue  of  a  treasur- 
er's deed,  dated  August  12th  1852,  on  a  sale  made  June  14th  1852, 
for  the  taxes  of  1850-51.  The  land,  100  acres,  had  been  sold,  by 
John  Reynolds,  to  one  Eleazer  Rockwell,  in  1840;  who  retained  it 
and  paid  the  taxes  on  it,  up  to  1850,  when  he  relinquished  the  land 
to  Reynolds,  who  immediately  sold  the  land  in  controversy,  to  one 
Wright,  under  whom  the  plaintiffs  in  error  claim.  The  land  was 
assessed  and  sold  as  Xo.  1302,  and  in  the  name  of  E.  Rockwell.  The 
assessors  proved  that  it  was  the  land  in  controversy,  that  was  as- 
sessed with  the  taxes,  and  the  land  which  Rockwell  had  of  Reynold?. 
The  assessments  for  a  number  of  years  prior  to  1850,  being  given  in 
evidence,  it  appeared  to  have  some  times  been  assessed  by  the  cor- 
rect number,  152,  sometimes  as  1502,  and  1302,  E.  Rockwell;  and 
a  part  to  John  Reynolds  as  1502.  Upon  this  state  of  facts,  the 
court  below  charged,  in  answer  to  several  points  of  the  defendants, 
"that  marks  and  surveys  are  not  the  exclusive  and  only  indices  lay 
which  it  (the  land)  may  be  designated;"  and  "that  it  is  not  essen- 
tially necessary  that  a  donation  tract  should  be  assessed  by  its  dis- 
tinctive number,  provided  it  has  other  names  or  means  by  which  it 
may  be  known;"  and  submitted  the  facts,  on  the  question  of  the 
identity  of  the  land,  as  that  on  which  the  assessment  was  made,  to 
the  jury.  We  think  the  learned  judge  was  right  in  so  charging  ancf 
submitting  the  facts.  The  land  was  known  in  the  assessment-books, 
and  in  the  neighbourhood  by  the  name  of  Rockwell,  the  person  in 
whose  name  it  was  assessed  and  sold,  and  who  had  been  in  fact  an 
owner  and  taxpayer  on  it  for  ten  years.  This  fact  would  necessarily 
give  it  a  designation  as  his  land,  and  Mr.  Reynolds,  or  a  purchaser 
from  him,  would  most  naturally  expect  to  find  it  taxed  in  that  name. 
They  could  not  claim — for  it  would  be  contrary  to  all  reason — that 
such  a  designation  could  mislead  them.  It  was  a  good  designation : 
for  the  tax  of  1850.  was  in  all  probability,  assessed,  while  Rockwell 


444          LISTING  OF  PEfiSONS  AND  VALUATION. 

was  still  owner  of  it;  and  to  continue  it  in  the  same  name,  unless 
the  owner  chose  to  change  it  to  his  own,  was  an  every  day  occur- 
rence. It  was  a  sufficient  designation  of  the  tract,  to  have  corrected 
any  errors  induced  by  the  number.  It  is  worthy  of  note,  in  this 
connection,  that  the  number,  if  correctly  given,  would  have  been  of 
little  value  as  a  designation,  as  there  were  several  subdivisions  of 
the  tract,  all  entitled  to  claim  the  same  number  as  a  designation. 

But  the  number  as  given,  could  not  have  misled  anyone,  at  all 
acquainted  with  or  interested  in  the  land.  It  was  in  fact  an  impos- 
sible one.  That  tract,  1302,  lay  entirely  in  a  different  district — the 
land  in  question  being  situate  in  the  8th  district,  and  No.  1302  in 
the  7th;  a  seated  tract,  with  which  E.  Kockwell's  name  had  no  con- 
nexion whatever.  We  attribute,  however,  to  donation  numbers,  as  a 
designation  in  assessments,  no  more  virtue  than  to  warrant  num- 
bers. Dunden  v.  Snodgrass  was  of  this  latter  kind.  The  true  num- 
ber of  the  warrant  was  624;  it  was  assessed  and  sold  as  No.  18. 
There  being  other  means  of  designation  in  the  case,  this  court  held 
the  error  in  the  number  of  no  account.  And  for  the  same  reason, 
we  so  hold  in  this  case.  The  law  was  correctly  given  to  the  jury, 
and  there  is  no  error  in  the  second,  third  and  fourth  assignments. 

On  consideration  of  the  whole  case  we  are  of  opinion  that  this 
judgment  should  be  affirmed. 

Judgment  affirmed. 

Land  office  abbreviations  are  sufficient  description.  Association  v.  Wag- 
oner, 33  Ind.  51.  City  lots  may  be  described  in  accordance  with  city  tax 
plan.  Janesville  v.  Markoe,  18  Wis.  350.  But  where  statute  says  land  must 
be  described  by  metes  and  bounds  this  method  must  be  followed.  People 
v.  Cone,  48  Cal.  427. 


BOSWORTH  V.  DANZIEN. 

Supreme  Court  of  California.     April,  1864. 
25  California  291. 

By  the  Court,  SHAFTER,  J. : 

This  is  an  action  of  ejectment  brought  to  recover  the  possession 
of  certain  lands  situate  in  the  city  and  county  of  San  Francisco. 
The  case  was  tried  by  the  Court,  and  the  plaintiff  appeals  from  the 
judgment  rendered  against  him,  and  from  an  order  denying  his 
motion  for  a  new  trial. 

In  the  description  of  the  premises,  as  set  forth  in  the  complaint, 


BOSWOKTH  V.  DANZIEN.  445 

the  initial  point  and  the  first  two  courses  therefrom  are  described 
as  follows:  "Commencing  at  the  northeasterly  corner  of  Center  and 
Guerrero  streets,  running  thence  easterly  on  Center  street  ninety 
feet;  thence  at  right  angles  northerly,"  etc. 

The  plaintiff  claimed  title  to  the  premises  by  virtue  of  a  tax 
deed  executed  to  him  under  the  Revenue  Act  of  1857.  When  the 
deed  was  offered  in  evidence,  it  was  objected  to  by  the  defendants 
as  inadmissible,  "because  the  deed  does  not  describe  the  land  by 
metes  and  bounds,  and  the  description  is  fatally  defective  in  calling 
for  wrong  streets,  and  the  lines  cannot  be  made  to  meet." 

The  deed  was  admitted  by  the  court,  subject  to  the  objections; 
and  from  the  findings,  we  must  conclude  that  the  court  in  the  end 
excluded  the  deed  as  being  void  upon  its  face.  The  error  assigned 
relates  to  the  correctness  of  that  ruling. 

The  deed  recites  that  the  land  purchased  by  the  plaintiff  at  the 
tax  sale  was  a  part  of  a  larger  tract  ''assessed,  levied  upon,  and  ad- 
vertised," and  then  proceeds  to  describe  the  part  purchased  by  metes 
and  bounds;  and  on  comparing  the  description  with  the  description 
given  in  the  complaint  of  the  premises  demanded  we  find  them  to 
agree  in  every  particular. 

The  deed  also  recites  the  description  of  the  larger  tract  of  land 
as  given  in  the  assessment  roll  and  advertisement.  The  point  of 
beginning  and  the  first  course  and  distance  therefrom,  are  described 
as  follows:  "Lot  commencing  on  the  northeasterly  corner  of  Center 
and  Guerrero  streets,  thence  easterly  on  Corbett  street,  two  hundred 
feet,  thence  at  right  angles  northerly,"  etc. 

It  will  be  observed  that  the  description  in  the  assessment  roll  be- 
gins at  the  northeasterly  corner  of  Center  and  Guerrero  streets  and 
rims  thence  easterly  on  Corbett  street  two  hundred  feet,  and  that 
in  the  description  of  the  land  sold  and  conveyed,  the  same  line  is 
described  as  beginning  at  the  same  point,  running  easterly  there- 
from on  Center  street. 

The  Court  has  found  in  effect  that  a  line  drawn  easterly,  that  is, 
due  east,  (1  Johns.  156;  3  Caines,  293,)  from  the  corner  named, 
would  run  along  Center  street  in  fact,  and  furthermore  it  is  impos- 
sible that  it  should  be  otherwise — the  corner,  the  direction  of  the 
streets  toward  the  cardinal  points,  and  their  subsequent  intersection 
at  right  angles  being  given. 

We  here  assume  the  true  point  of  the  respondent's  objection  to 
the  validity  of  the  deed  to  be,  that  the  description  of  the  south  line 
of  the  tract  assessed  is  contradictory  in  fa:t,  and,  not  being  true 


446          LISTING  OF  PERSONS  AND  VALUATION. 

to  the  whole  extent  of  the  terms  used,  that  the  assessment  is  utterly 
void  as  matter  of  law.  The  counsel  of  the  appellant,  meeting  the 
case  in  this  aspect  of  it,  seeks  to  defeat  this  consequence  on  the 
ground  that  the  false  call  in  the  description  of  the  property  as  listed 
may  be  rejected  as  surplusage. 

1.  Where,  in  case  of  a  deed  voluntarily  executed  by  the  owner 
of  land,  it  appears  upon  applying  the  instrument  to  its  subject  mat- 
ter, the  description  in  it  is  true  in  part,  but  not  true  in  every  par- 
ticular, so  much  of  the  description  as  is  false  will  be  rejected,  and 
the  instrument  will  take  effect  if  a  sufficient  description  remains  to 
ascertain  its  application.  Falsa  demonstratio  non  nocet  cum  de  cor- 
pore  constat.  Smith  v.  Galloway,  5  B.  &  Aid.  43,  51.  In  such 
case,  evidence  of  res  gestae  will  be  received  for  the  purpose  of  as- 
certaining the  intention  of  the  parties,  and  giving  to  it  a  complete 
effect  and  operation. 

But  tax  proceedings  are  in  invitum.  The  land  owner  intends 
nothing.  The  Government,  acting  after  its  own  methods  and 
through  its  own  agents,  seeks  to  enforce  the  collection  of  a  tax  which 
it  has  imposed  upon  the  citizen;  and  it  follows  that  if  a  false  de- 
scription in  a  tax  deed  or  assessment  roll  can  be  rejected  as  sur- 
plusage, it  cannot  be  for  the  reason  that  it  is  necessary  that  it  should 
be  so  dealt  with  in  order  that  the  intention  of  the  parties  may  be 
fulfilled.  It  does  not,  however,  follow  that  a  false  call  occurring 
in  an  assessment  roll  is  to  be  retained  to  the  entire  overthrow  of 
the  tax  title,  because  it  cannot  be  rejected  for  the  particular  reason 
above  stated. 

It  not  unfrequently  happens  that  a  case  arises,  not  in  all  respects 
within  the  beneficial  operation  of  one  rule  of  law,  but  which  may  be 
manifestly  within  the  saving  operation  of  another,  going  upon 
broader  conditions.  The  maxim,  "Vt  res  magis  valeat  quam  pereat," 
is  a  canon  with  reference  to  which  not  only  contracts  and  wills  are 
to  be  construed,  but  statutes  also — passed,  as  they  are,  without  any 
direct  cooperation  or  assent  on  the  part  of  the  citizen.  The  spirit 
of  the  maxim  is,  that  nothing  should  be  destroyed  merely  for  the 
sake  of  destruction.  We  have  not,  by  our  own  examination,  been 
able  to  find  any  adjudged  case  in  which  it  has  been  held  that  a 
false  call  in  an  assessment  roll,  advertisement,  or  tax  deed,  neces- 
sarily vitiates  a  tax  title.  The  rule  as  given  in  Tollman  v.  White, 
2  N.  Y.  66,  is  as  follows :  "An  assessment  of  land  is  fatally  de- 
fective and  void  if  it  contains  such  a  falsity  in  the  designation  or 
description  of  the  parcel  assessed  as  might  probably  mislead  th;1 
owner,  and  prevent  him  from  ascertaining  by  the  notice?  that  his 


HERSEY  V.  BOARD  OF  SUPERVISORS.  447 

land  was  to  be  sold  or  redeemed.  Such  mistake  or  falsity  defeats 
one  of  the  obvious  and  just  purposes  of  the  statute — that  of  giving 
to  the  owner  an  opportunity  of  preventing  the  sale  by  paying  the 
tax."  We  accept  the  above  decision,  not  more  on  the  authority  of 
the  Court  by  which  it  was  pronounced,  than  on  our  entire  convic- 
tion that  it  is  correct  in  principle. 

The  test,  then,  to  which  every  false  call  occurring  in  the  course 
of  tax  proceedings  is  to  be  subjected  is  this:  Has  it  probably  had 
the  effect  to  mislead  the  landowner  in  relation  to  the  land  assessed, 
advertised  and  sold? 

In  the  case  at  bar,  the  description  in  the  assessment  roll  begins  at 
a  point  fixed  with  entire  precision,  and  runs  therefrom  due  east 
two  hundred  feet.  The  superadded  description  of  that  line — "along 
Corbett  street" — was  not,  in  our  judgment,  calculated  to  mislead 
the  landowner,  and  for  the  manifest  reason  that  it  was  impossible 
that  the  call  should  be  true.  The  call  was  not  only  false,  but  ab- 
surd, and  that,  too,  in  the  light  of  facts  appearing  on  the  face  of 
the  general  description  of  the  corner  and  line. 

Judgment  reversed,  and  new  trial  ordered. 

Personal  property  need  not  generally  be  described  in  an  assessment.  Its 
amount  is  all  that  need  be  stated  unless  a  statute  provides  otherwise.  People 
v.  Home  Ins.  Co.,  29  Cal.  536;  People  v.  Holaday,  25  Cal.  305. 


VIII.    METHOD  OF  VALUATION. 
HERSEY  V.  BOARD  OF  SUPERVISORS. 

Supreme  Court  of  Wisconsin.     January,  1875. 
37  Wisconsin  75. 

COLE,  J.  This  is  an  appeal  from  an  order  denying  a  motion  to 
dissolve  a  temporary  injunction  restraining  the  county  treasurer 
from  selling  lands  for  delinquent  taxes.  The  motion  to  dissolve 
stated  that  it  would  be  founded  on  the  original  injunction  order, 
complaint  and  answer  on  file.  On  the  hearing  of  the  motion,  tho 
plaintiffs  were  permitted  to  read,  against  the  objection  of  the  de- 
fendants, affidavits  in  support  of  the  allegations  of  the  complaint. 

The  complaint  alleges,  that  certain  rules  were  adopted  by  the  as- 
sessors in  1872,  for  the  assessment  of  real  estate  in  Barren  county, 


448          LISTING  OF  PERSONS  AND  VALUATION. 

and  that  the  same  rules  were  followed  by  the  assessor  and  board  of 
review  in  making  the  assessment  for  the  year  1873,  upon  which  the 
tax  in  question  was  levied.  These  rules  are  as  follows:  First. 
Pine  on  first  class  driving  streams  assessed  at  $2  per  M.  within  the 
limits  of  two  miles  hauling.  Second.  Pine  on  such  streams  of  more 
than  two  miles  hauling  at  $1.50  per  M.  Third.  Pine  on  second 
class  driving  streams,  as  Moose  Ear  and  other  streams  mentioned,  at 
$1.50  per  M.  within  two  miles,  and  $1.00  per  M.  beyond.  Fourth. 
Pine  on  fourth  class  waters,  head  of  Yellow  river,  north  of  Bear 
Lake,  at  50  cents  per  M.  Fifth.  Lands  entered  for  farm  lands 
(wild)  at  from  $2.50  to  $10  per  acre,  according  to  locality;  and  cul- 
tivated, at  $6  per  acre.  Sixth.  Cut  lands  according  to  inspectors* 
reports,  at  12^2  cents  per  acre. 

It  sufficiently  appears  from  this  averment,  as  well  as  from  other 
admissions  in  the  answer,  that  these  rules  were  made  the  basis  of 
the  assessment  for  the  year  1873;  and  assuming,  as  we  may  well 
do,  that  they  were  adopted  with  no  fraudulent  intent,  and  with  no 
purpose  of  favoring  any  owner  of  real  estate,  the  question  then 
arises,  Was  the  assessment  valid  which  was  made  in  conformity  to 
them?  It  appears  to  us  that  it  was  not. 

The  statute  directs  the  manner  in  which  real  estate  shall  be  listed 
or  valued  for  taxation.  "Real  property  shall  be  valued  by  the  as- 
sessor from  actual  view,  at  the  full  value  which  could  ordinarily  be 
obtained  therefor  at  private  sale,  and  which  the  assessor  shall  be- 
lieve the  owner,  if  he  desires  to  sell,  would  accept  in  full  payment. 
In  determining  the  value,  the  assessors  shall  consider,  as  to  each 
piece,  its  advantage  or  disadvantage  of  location,  quality  of  soil, 
quantity  and  quality  of  standing  timber,  water  privileges,  mines, 
minerals,  quarries,  or  other  valuable  deposits  known  to  be  available 
therein,  and  all  buildings,  fixed  machinery  and  improvements  of 
every  description  thereon,  and  their  value."  Sec.  16,  ch.  130,  Laws 
of  1868.  The  listing  and  valuation  are  the  foundation  of  all  the 
subsequent  proceedings;  and  this  provision  prescribes  the  manner 
in  which  they  shall  be  made,  with  the  manifest  purpose  that  the 
tax  levied  upon  each  tract  shall  be  relatively  according  to  its  real 
value.  The  assessor  is  required  to  make  the  valuation  from  actual 
view,  and  he  is  called  upon  to  exercise  his  judgment  with  reference 
to  each  tract,  its  advantage  or  disadvantage  of  location,  the  quality 
of  the  soil,  the  quantity  and  quality  of  standing  timber;  in  short; 
he  is  to  consider  all  the  elements  which  enter  into  and  constitute 
its  value.  These  are  the  plain,  obvious  rules  and  principles  upon 


HERSEY  V.  BOARD  OF  SUPERVISORS.  449 

which  the  statute  contemplates  that  the  valuation  shall  be  made, 
By  the  rules  in  question,  these  statutory  principles  were  utterly  ig- 
nored and  disregarded.  An  arbitrary  classification  was  applied  to 
the  real  estate.  It  is  conceded  that  the  lands  were  generally  wild, 
pine  lands.  The  standing  pine  on  what  is  called  first  class  driving 
streams  was  assessed  at  $2  per  M.  within  the  limits  of  two  miles, 
regardless  of  the  advantage  or  disadvantage  of  its  location  up  or 
down  the  stream  and  wholly  ignoring  the  element  or  quality  in  the 
standing  timber.  In  respect  to  pine  on  such  streams,  which  had  to 
be  hauled  more  than  two  miles,  the  same  arbitrary  value  was  affixed, 
regardless  of  its  quality  or  location  from  the  source  or  mouth  of 
the  stream.  The  same  remarks  apply  to  the  other  classification  in 
the  rules.  The  real  estate  is  valued  solely  with  reference  to  the 
quantity  of  pine  timber  standing  upon  it,  without  taking  into  ac- 
count the  quality  of  it,  its  location  up  or  down  the  stream,  or  the 
character  of  the  soil,  or  those  other  elements  which  determine  the 
value  of  land,  and  which  the  statute  says  the  assessor  shall  consider 
and  regard  in  making  the  valuation.  That  a  valuation  thus  made 
would  necessarily  operate  unjustly  and  unequally,  seems  to  us  too 
plain  for  discussion.  True,  it  is  alleged  in  the  answer  that  it  was 
only  practicable  to  make  a  fair  and  equitable  valuation  of  the  real 
estate  under  these  rules,  which  is  equivalent  to  saying  that  the  law 
upon  the  subject  cannot  be  complied  with.  But  if  no  valuation  can 
be  made  as  the  statute  requires,  we  fail  to  see  upon  what  ground 
the  tax  can  be  sustained.  A  valuation  is  essential  to  lay  the  founda- 
tion for  the  tax;  and  if  no  legal  valuation  was  practicable,  it  fol- 
lows that  any  tax  based  wholly  upon  an  unauthorized  valuation 
would  be  illegal  and  void.  The  allegation  is  a  felo  de  se. 

But  it  is  said  by  the  counsel  for  the  defendants,  that  even  if  the 
rules  above  quoted  were  absolutely  followed  and  strictly  pursued  by 
the  assessor  in  making  the  valuation,  yet,  if  they  were  honesth 
adopted  as  expressive  of  the  judgment  of  the  assessor,  there  being  no 
question  of  fraudulent  intent,  a  court  of  equity  would  not  say  the 
assessment  was  void.  But  how  can  a  court  of  equity  pronounce  an 
assessment  valid  which  is  in  plain  violation  of  law?  Real  estate 
must  be  valued  in  the  manner  and  upon  the  principles  prescribed 
by  the  statute.  The  assessor  may  make  a  mistake  in  the  valuation 
while  honestly  attempting  to  execute  the  law.  Errors  of  judgment, 
inequalities  in  valuation,  will  intervene  in  all  proceedings  of  this 
character.  It  might  not  be  practicable  for  the  assessor  to  go  over 
every  foot  of  ground  and  thus,  from  "actual  view"  of  every  part  of 
a  tract,  determine  its  true  market  value,  at  the  time  of  the  assess- 
29 


450          LISTING  OF  PERSONS  AND  VALUATION. 

ment.  But  there  should  be  an  attempt  to  substantially  comply  with 
the  law.  Here  we  feel  warranted  in  assuming,  upon  the  admissions 
in  the  answer,  that  the  law  was  disregarded,  the  assessor  adopting 
for  the  guidance  of  his  judgment  rules  which  not  only  departed 
from  the  statutory  requirements,  but  which  could  not  fail  in  their 
operation  to  defeat  a  fair  and  just  valuation.  That  such  must  have 
been  the  necessary  effect  of  the  rules  upon  the  valuation,  seems  to 
us  perfectly  obvious.  As  remarked  by  counsel  for  the  plaintiffs,  the 
idea  that  standing  pine,  just  two  miles  from  a  stream,  should  be  as- 
sessed at  $2  per  M.,  though  of  a  poor  quality,  while  excellent  tim- 
ber on  an  adjoining  tract,  a  little  further  from  the  stream,  is  as- 
sessed at  $1.50  per  M.,  confounds  all  notions  of  justice  and  equality. 

That  the  assessment  made  under  the  rules,  and  the  taxes  levied 
upon  the  lands  of  the  plaintiffs,  were  void,  and  that  a  court  of  equity 
will  interfere  to  restrain  the  sale,  follows  from  the  decisions  in 
Hamilton  v.  The  City  of  Fond  du  Lac,  25  Wis.  490,  and  The  Mil- 
waukee Iron  Co.  v.  The  Town  of  Hubbard,  29  id.  51.  Those  cases 
seem  to  be  directly  in  point  upon  that  position. 

By  the  Court. — The  order  of  the  circuit  court  is  affirmed. 


STATE  V.  JESSE  PLATT. 

Supreme  Court  of  New  Jersey.      June,  185S. 
2Jf  New  Jersey  Law.  108. 

This  was  a  certiorari,  prosecuted  by  John  B.  Coles  and  others, 
devisees  of  John  B.  Coles,  deceased,  to  review  and  correct  the  as- 
sessment of  taxes  made  by  the  assessors  of  Jersey  City,  in  the  year 
1851,  upon  the  lands  of  the  prosecutors. 

ELMER,  J 

But  it  is  objected  that  the  value  placed  on  this  property  is 
imaginary  and  exorbitant.  -There  are  about  three  thousand  lote, 
and  the  value  exceeds  a  million  dollars.  If  rightly  assessed  as 
lots,  as  I  think  they  were,  they  were  of  course  to  be  valued  as  lots, 
and  such  was  the  intention  of  the  charter.  The  city  is  rapidly  ex- 
tending, and  every  improvement  made  in  it  tends  directly  to  en- 
hance the  value  of  the  lots,  so  that  in  justice  they  ought  to  con- 
tribute their  fair  proportion  of  those  expenses  which  make  the  city 
desirable  as  a  residence  and  quicken  its  growth.  If  overvalued,  the 
remedy  of  the  owners  was  by  an  appeal  to  the  commissioners  select- 


STATE  V.  JESSE  PLATT.  451 

ed  for  the  purpose  of  revising  the  estimate  of  the  assessors,  and  this 
remedy  they  availed  themselves  of.  It  is  certainly  shown  that  the 
present  income  of  the  property  bears  no  comparison  to  the  interest 
of  the  money  at  which  it  is  valued.  But  the  income  is  not  the  cri- 
terion; and  it  is  not  shown  that  they  are  valued  beyond  the  true, 
full,  fair  value  of  them,  certainly  not  so  far  beyond  it  as  to  sho\v 
such  partiality  and  misconduct  in  the  officers  as  would  justify  us 
in  holding  the  assessment  to  be  wholly  void.  The  lots  were  not  val- 
ued so  high  as  the  price  at  which  they  are  held,  and  are  not  value. 1 
higher  than  other  property  in  the  city  in  a  similar  condition. 

Another  objection  to  this  taxation  is,  that  when  it  was  made  the 
churches  within  the  limits  of  the  city  were  not  in  terms  exempted 
from  taxation  by  the  charter,  and,  although  shown  to  be  of  the  ag- 
gregate value  of  one  hundred  thousand  dollars,  they  were  not  as- 
sessed. Meeting  houses  and  school  houses,  although  not  formally 
exempted  by  the  tax  laws  in  force  prior  to  1851,  were  seldom  if  ever 
assessed  in  any  part  of  the  state.  This  omission  was  so  obviously 
proper,  and  so  entirely  in  accordance  with  the  public  sentiment,  that 
it  universally  prevailed,  and  was  in  fact  a  contemporaneous  con- 
struction of  the  laws  this  court  would  probably  have  sanctioned,  had 
the  question  been  formally  raised.  When  the  new  system  was  adopt- 
ed, the  exemption  was  for  the  first  time  expressly  enacted;  and  al- 
though not  contained  in  the  charter  of  Jersey  City,  I  do  not  think 
the  omission  to  tax  the  churches  such  an  illegality  as  ought  to  ren- 
der the  whole  assessment  void. 

It  would  be  a  novel  and  dangerous  doctrine  to  hold,  that  if  the 
assessors  happen  to  omit  some  property  really  taxable,  the  assess- 
ment is  thereby  necessarily  void,  so  that  no  taxes  can  be  collected. 
There  is,  perhaps,  scarcely  a  district  in  the  state  where  this  does 
not  happen,  to  a  greater  or  less  extent,  almost  every  year.  It  is 
undoubtedly  the  duty  of  the  assessor  to  include  all  the  property  lia- 
ble to  be  taxed;  but  unless  it  be  in  cases  involving  a  palpable  and 
greatly  injurious  disregard  or  misconstruction  of  plain  requirements 
of  the  law  from  the  necessity  of  the  case,  this  is  a  matter  which 
must  be  left  to  his  own  vigilance.  In  the  case  of  The  State  v. 
Branin,  this  court  held  that  an  omission  to  assess  a  poll-tax  vitiated 
the  whole  assessment;  but  in  that  case  there  was  not  a  mere  omis- 
sion to  assess  some  particular  individuals  or  property,  there  was  a 
flagrant  misconstruction  of  the  law,  affecting  every  taxable  inhab- 
itant, very  different  in  its  character  from  the  case  before  us.  In 
the  case  of  Williams  v.  School  District,  21  Pick.  75,  the  Supreme 


452          LISTING  OF  PERSONS  AND  VALUATION. 

Court  of  Massachusetts  held  that  an  omission  would  not  invalidate 
an  assessment.  The  same  principle  was  affirmed  in  the  case  of 
George  v.  Inhabitants,  &c.,  6  Mete.  497. 

The  only  valid  objection  I  find  to  this  assessment  is,  that  the 
assessors  included  in  it  the  sum  of  $2,458.98  for  losses  and  contin- 
gencies. Fifteen  hundred  dollars  were  ordered  to  be  assessed,  by 
the  ordinance  of  the  council,  for  contingent  expenses,  as  by  the  char- 
ter they  were  authorized.  But  this  additional  sum  is  illegal.  It 
must,  therefore,  be  referred  to  a  commissioner  to  ascertain  what  is 
the  prosecutor's  proportion  of  this  sum,  and  to  that  extent  the  as- 
sessment must  be  set  aside,  and  as  to  all  the  rest  affirmed. 


PEOPLE  EX  EEL.  TEUST  CO.  V.  COLEMAN  ET  AL. 

Court  of  Appeals  of  New  York.     June,  1891. 
126  New  York,  4SS. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court  in  the  first  judicial  department,  entered  upon  an  order  made 
the  first  Monday  of  October,  1890,  which  affirmed  an  order  of  Spe- 
cial Term  dismissing  a  writ  of  certiorari  to  review  an  assessment 
of  the  relator*s  capital  for  the  year  1889. 

The  relator  is  a  corporation  organized  under  a  special  act  of  the 
legislature  of  1864  (Chap.  316,  Laws  of  1864),  doing  business  as 
a  trust  company  in  the  city  of  New  York.  On  the  second  Monday 
in  January,  1889,  it  furnished  to  the  commissioners  of  taxes  and 
assessment  a  detailed  statement  of  its  assets  and  liabilities  which 
was  duly  sworn  to,  and  claimed  that  all  its  capital  stock  and  sur- 
plus, being  invested  in  United  States  securities,  was  exempt.  The 
commissioners  held  that  the  capital  stock,  the  actual  value  of  which 
they  were  to  assess,  was  the  shares  and  they  ascertained  such  value 
by  multiplying  the  nominal  capital  by  the  market  price  of  the  shares 
and  deducted  therefrom  ten  per  cent  of  the  nominal  capital,  the 
assessed  value  of  the  real  estate  and  the  investments  in  United  States 
securities. 

FINCH,  J.  The  relator  has  been  assessed  upon  an  "actual  value" 
of  its  capital  stock  derived  entirely  from  the  market  value  of  its 
shares.  These  are  selling  at  the  large  premium  of  something  over 
five  hundred  dollars  for  each  share  of  one  hundred  dollars,  and  the 
assessors  have  concededly  taken  that  valuation,  or  the  principal  part 
thereof,  as  the  "actual  value"  of  the  company's  stock  liable  to  tax- 


PEOPLE  V.  COLEMAN.  453 

ation,  instead  of  its  own  proved  and  established  value.  The  relator 
challenges  the  assessment,  and  through  all  the  proceedings  has  per- 
sistently raised  and  pressed  the  inquiry,  not  so  much  as  to  the  mode 
or  manner  of  ascertaining  value,  but  rather  as  to  what  is  the  precise 
thing  to  be  valued,  whether  the  capital  stock  of  the  company  or  the 
capital  stock  held  in  shares  by  the  corporators.  If  these  are  the 
same,  or,  in  any  sense,  equivalents,  either  might  be  valued  without 
substantial  error,  but  if  they  are  not  such,  we  must  determine  which 
is  to  be  valued  before  we  can  solve  the  problem  of  how  to  value  it. 
Now,  it  is  certain  that  the  two  things  are  neither  identical  nor 
equivalents.  The  capital  stock  of  a  company  is  one  thing;  that  of 
the  shareholders  is  another  and  a  different  thing.  That  of  the  com- 
pany is  simply  its  capital,  existing  in  money  or  property,  or  both; 
while  that  of  the  shareholders  is  representative,  not  merely  of  that 
existing  and  tangible  capital,  but  also  of  surplus,  of  dividend  earn- 
ing power,  of  franchise  and  the  good  will  of  an  established  and  pros- 
perous business.  The  capital  stock  of  the  company  is  owned  and 
held  by  the  company  in  its  corporate  character;  the  capital  stock  of 
the  shareholders  they  own  and  hold  in  different  proportions  as  indi- 
viduals. The  one  belongs  to  the  corporation;  the  other  to  the  cor- 
porators. The  franchise  of  the  company,  which  may  be  deemed  its 
business  opportunity  and  capacity,  is  the  property  of  the  corpora- 
tion, but  constitutes  no  part  or  element  of  its  capital  stock;  while 
the  same  franchise  does  enter  into  and  form  part,  and  a  very  essen- 
tial part,  of  the  shareholder's  capital  stock.  While  the  nominal  or 
par  value  of  the  capital  stock  and  of  the  share  stock  are  the  same, 
the  actual  value  is  often  widely  different.  The  capital  stock  of  the 
company  may  be  wholly  in  cash  or  in  property,  or  both,  which  may 
be  counted  and  valued.  It  may  have  in  addition  a  surplus,  consist- 
ing of  some  accumulated  and  reserved  fund,  or  of  undivided  profits, 
or  both,  but  that  surplus  is  no  part  of  the  company's  capital  stock, 
and,  therefore,  is  not  itself  capital  stock.  The  capital  cannot  he 
divided  and  distributed;  the  surplus  may  be.  But  that  surplus 
does  enter  into  and  form  part  of  the  share  stock,  for  that  repre- 
sents and  absorbs  into  its  own  value  surplus  as  well  as  capital,  and 
the  franchise  in  addition.  So  that  the  property  of  every  company 
may  consist  of  three  separate  and  distinct  things,  which  are  its 
capital  stock,  its  surplus,  its  franchise;  but  these  three  things,  sev- 
eral in  the  ownership  of  the  company,  are  united  in  the  ownership 
of  the  shareholders.  The  share  stock  covers,  embraces,  represents 
all  three  in  their  totality,  for  it  is  a  business  photograph  of  all  the 
corporate  possessions  and  possibilities.  A  company  also  may  have 


454          LISTING  OF  PERSONS  AND  VALUATION. 

no  surplus,  but,  on  the  contrary,  a  deficiency  which  works  an  im- 
pairment of  its  capital  stock.  Its  actual  value  is  then  less  than 
its  nominal  or  par  value,  while  yet  the  share  stock,  strengthened  by 
hope  of  the  future  and  the  support  of  earnings,  may  be  worth  its 
par,  or  even  more.  And  thus  the  two  things — the  company's  cap- 
ital stock  and  the  shareholder's  capital  stock — are  essentially  and  in 
every  material  respect  different.  They  differ  in  their  character,  in 
their  elements,  in  their  ownership  and  in  their  values.  How  im- 
portant and  vital  the  difference  is,  became  evident  in  the  effort  by 
the  state  authorities  to  tax  the  property  on  the  national  banks.  Tha 
effort  failed,  and  yet  the  share  stock  in  the  ownership  of  individ- 
uals was  held  to  be  tax-able  as  against  them.  The  corporation  and 
its  property  were  shielded,  but  the  shareholders  and  their  property 
were  taxed. 

Now  some  degree  of  confusion  and  trouble  have  come  in  because 
these  two  different  things  are  denominated  alike  capital  stock,  mak- 
ing the  expression  sometimes  ambiguous.  It  is  the  important  and 
decisive  phrase  in  the  law  of  1857,  under  which  the  assessment  here 
resisted  w.as  made,  and  requires  of  us  to  determine  at  the  outset  in 
which  sense  it  was  used.  The  section  reads  thus:  "The  capital 
stock  of  every  company  liable  to  taxation,  except  such  part  of  it 
as  shall  have  been  excepted  in  the  assessment-roll,  or  shall  have  been 
exempted  by  law,  together  with  its  surplus  profits  or  reserved  funds 
exceeding  ten  per  cent  of  its  capital,  after  deducting  the  assessed 
value  of  its  real  estate,  and  all  shares  of  stock  in  other  corporations 
actually  owned  by  such  company  which  are  taxable  upon  their  capi- 
tal stock  under  the  laws  of  this  state,  shall  be  assessed  at  its  actual 
value  and  taxed  in  the  same  manner  as  the  other  real  and  personal 
estate  of  the  county." 

There  are  reasons  in  abundance  for  the  conclusion  that  by  the 
phrase  "capital  stock"  the  statute  means  not  the  share  stock,  but 
the  capital  owned  by  the  corporation;  the  fund  required  to  be  paid 
in  and  kept  intact  as  the  basis  of  the  business  enterprise,  and  th" 
chief  factor  in  its  safety.  One  ample  reason  is  derived  from  the 
fact  that  the  tax  is  assessed  against  the  corporation  and  upon  its 
property,  and  not  against  the  shareholders,  and  so  upon  their  prop- 
erty. In  theory  every  tax  is  charged  against  some  person,  natural 
or  artificial,  resident  or  non-resident,  known  or  unknown.  It  is  as- 
sessed not  upon  property  irrespective  of  ownership,  but  against  per- 
sons in  respect  to  their  property  (23  N.  Y.  215),  and  effects  not 
merely  a  lien,  but  also  a  personal  liability.  On  the  assessment-rolls 
in  this  case  appeared  the  name  of  the  relator  as  the  person  a«- 


PEOPLE  V.  COLEMAN.  455 

sessed,  and  that  amount  of  the  tax  became  a  charge  against  it.  Of 
course,  it  could  only  be  assessed  and  taxed  in  respect  to  its  own 
property,  that  which  in  its  corporate  character  it  owned  and  pos- 
sessed, and  so  it  follows  inevitably  that  the  statute  concerns  the 
company's  capital  stock,  that  is,  its  real  and  actual  capital,  and  not 
in  any  respect  the  share  stock  which  it  does  not  own  and  whose 
possessors  have  not  been  assessed. 

Another  reason  is  found  in  those  terms  of  the  statute  which  in- 
clude and  exclude  respectively  specific  kinds  or  classes  of  property 
in  the  corporate  ownership.  Thus  the  assessment  is  to  be  laid  not 
merely  upon  the  capital  stock  of  the  corporation,  but  also  upon  its 
surplus.  Xo  such  explicit  direction  was  necessary,  except  upon  the 
assumption  that  by  the  words  "capital  stock"  was  meant  simply 
"capital,"  which  would  not  include  surplus,  and  so  required  that  it 
be  subjected  by  name  to  the  valuation.  If  the  share  stock  was 
meant  its  value  would  include  surplus  and  make  its  specification  not 
only  needless  but  confusing.  But  while  the  statute  includes  sur- 
plus by  specific  mention,  it  excludes  franchise  by  omitting  it.  The 
omission  of  franchise  is  emphasized  by  the  careful  inclusion  of  sur- 
plus. It  is  fully  and  definitely  settled  that  the  tax  imposed  by  the 
statute  is  not  upon  the  franchise.  People  v.  Commrs.  of  Taxes,  2 
Black.  620.  But  if  that  be  so,  it  is  not  upon  the  share  stock,  for 
that  represents  the  value  of  the  corporate  franchise  as  a  part  of 
the  total  of  the  corporate  property.  And  so,  both  by  what  it  spe- 
cifically includes  and  silently  excludes,  the  statute  itself  informs  us 
that  by  "capital  stock"  it  means  and  intends  the  company's  actual 
capital  paid  in  and  possessed,  and  not  at  all  or  in  any  sense  the 
share  stock. 

The  same  thing  becomes  apparent  from  a  study  of  the  whole  line 
of  legislation  which  culminated  in  the  law  of  1857.  It  was  traced  in 
detail  upon  the  argument  with  great  industry  and  wealth  of  illus- 
tration. We  have  verified,  it  by  traveling  over  the  same  track,  and 
without  taking  pains  to  reproduce  it,  may  assert  the  general  result 
which  it  discloses  and  select  out  one  or  more  illustrations.  The  in- 
vestigation shows  that  the  word  "capital"  and  the  phrase  "capital 
stock"  are  used  interchangeably  and  synonymously,  and  where  the 
latter  phrase  occurs  there  is  almost  always  something  in  the  statute 
which  stamps  and  labels  it  as  referring  to  the  actual  capital  of  the 
company.  Thus  the  law  of  1825  (Chap.  262),  after  providing  for 
the  taxation  of  all  persons  owning  or  possessing  property,  proceeds 
to  declare  that  corporations  shall  be  deemed  persons  for  the  pur- 
poses of  the  act,  and  requires  them  to  furnish  a  statement  of  the 


456          LISTING  OF  PERSONS  AND  VALUATION. 

amount  of  "capital"  actually  paid  in;  and  then,  referring  to  turn- 
pike and  bridge  companies,  requires  them  to  state  "the  amount  of 
capital  stock  actually  paid  in  or  secured  to  be  paid  in."  Both 
clauses  refer  to  the  same  assets  or  fund,  naming  it  indiscriminately 
*'capital"  and  "capital  stock."  Again,  in  the  law  of  1825  (Chap. 
254)  the  assessors,  after  putting  the  corporation  by  name  on  the 
assessment-roll,  are  required  to  add  the  amount  "of  its  capital  stock 
paid  in  or  secured  to  be  paid  in,"  and  to  designate  how  much  of  it 
is  in  real  and  how  much  in  personal  property,  and  so  no  doubt  is 
left  that  by  "capital  stock"  was  meant  simply  the  "capital"'  pos- 
sessed in  cash  or  invested  in  securities  or  real  estate. 

The  illustrations  might  be  multiplied  and  fortified  by  reference  to 
numerous  acts  relating  to  the  formation  or  management  of  manu- 
facturing, railroad,  business  and  telegraph  companies  in  which  the 
two  forms  of  expression  are  used  indiscriminately  and  as  convert- 
ible terms;  but  I  think  quite  enough  has  been  said  to  require  un- 
hesitating assent  to  the  proposition  that,  under  the  law  of  1857,  the 
thing  to  be  taxed  is  the  capital  of  the  company  and  not  the  shares 
of  the  stockholders. 

Indeed,  I  should  feel  bound  to  apologize  for  arguing  what  seems 
to  me  so  simple  and  plain  a  proposition,  were  it  not  for  the  fact 
that  it  has  been  largely  ignored  by  assessors  and  not  always  clearly 
kept  in  mind  by  the  courts,  and  but  for  the  further  fact  that  the 
right  to  adopt  as  the  taxable  valuation  the  value  of  the  shares, 
totally  disregarding  the  value  of  the  company's  capital,  has  been 
asserted  in  this  case,  maintained  by  the  courts  below,  and  claimed 
to  be  fully  justified  by  very  much  which  we  ourselves  have  decided 
or  said. 

Before  examining  the  cases  in  detail  to  see  whether  they  hamper 
our  freedom  of  judgment  upon  the  question  presented,  I  think  it 
safe  and  also  prudent  to  assert  three  things  as  applicable  generally 
and  to  all  the  cases  alike.  First,  this  court  has  never  decided, 
either  by  a  direct  determination  or  by  necessary  implication,  that 
the  law  of  1857  authorizes  the  imposition  of  a  tax  upon  anything 
else  than  the  actual  capital  of  the  corporations,  together  with  their 
surplus;  second,  that  the  precise  question  whether  the  capital  of 
the  companies  or  the  share  stock  of  the  shareholders  forms  the  basis 
of  valuation  and  the  thing  to  be  assessed,  has  not  been  heretofore 
formally  and  distinctly  presented;  and  third,  that  all  seemingly 
erroneous  expressions  of  opinion  are  corrected  at  once  when  they 
are  referred  to  the  permissible  conditions  under  which  the  value  of 
the  share  stock  in  the  market  may  be  referred  to,  not  as  the  thing 


PEOPLE  V.  COLEMAN.  457 

to  be  valued  and  assessed,  but  as  an  aid  or  help  in  discovering  the 
value  of  the  other  and  different  thing  which  is  to  be  valued  and 
assessed.  Keeping  these  general  principles  in  mind  we  now  recur 
to  the  cases. 

The  final  case  to  be  examined  is  People  ex  rel.  Knickerbocker 
Fire  Ins.  Co.  v.  Coleman  (107  N.  Y.  541).  It  appeared  that  the 
relator's  stock  at  par  amounted  to  $210,000  while  its  share  stock 
was  selling  below  par  and  for  ninety  cents  on  the  dollar.  But  the 
assessors  did  not  assess  the  share  stock,  nor  take  its  value  as  the 
test  of  capital,  and  so  showing  no  surplus  but  a  deficiency.  On  the 
contrary,  they  went  to  the  Company's  own  books  for  information 
and  there  found  not  a  deficiency  but  a  surplus,  and  deducting  from 
the  aggregate  of  capital  and  surplus  the  assessed  value  of  the  real 
estate,  United  States  stock  and  the  exempted  ten  per  cent,  they 
found  a  taxable  balance  of  about  $25,000.  The  company  resisted. 
Their  counsel  argued  that  the  "assessment  should  not  exceed  the 
market  value  of  the  capital  stock,  less  statutory  exemptions." 
(p.  542.)  By  capital  stock  he  plainly  meant  the  share  stock  which 
was  selling  at  ninety.  The  counsel  for  the  assessors  insisted  that 
"the  market  value  of  shares  of  stock  of  the  corporation  is  not  the 
proper  and  sole  test  of  the  value  of  the  corporate  capital."  On  that 
issue  we  sustained  the  assessment.  In  so  doing  we  necessarily  de- 
cided that  capital,  swollen  by  surplus  or  diminished  by  losses,  was 
the  subject  to  be  valued  and  taxed  and  not  the  share  stock;  and 
that  when  the  actual  value  of  capital  and  surplus  was  known  and 
established,  in  this  case  by  the  party's  own  books,  no  reference  to 
the  value  of  the  shares  could  be  permitted  to  lessen  the  valuation. 
The  case,  therefore,  was  correctly  decided  and  in  entire  accord  with 
the  doctrine  which  I  have  herein  advocated. 

But  the  opinion  contained  a  statement  which  has  been  cited  as 
conclusive  by  the  General  Term  and  also  on  the  argument  at  our 
bar,  and  to  which  I  now  refer  because  it  opens  the  way  to  the  final 
point  of  the  discussion  and  to  a  fact  which  accounts  for  and  ex- 
plains most  of  the  references  to  the  value  of  share  stock  which  are 
seemingly  of  a  doubtful  character.  The  language  was  this:  "The 
law  does  not  prescribe  how  the  actual  value  of  the  capital  stock  of 
a  corporation  shall  be  ascertained.  That  is  left  to  the  judgment  of 
the  assessors,  and  in  appraising  the  actual  value  they  have  a  right 
to  resort  to  all  the  tests  and  measures  of  value  which  men  ordinarily 
adopt  for  business  purposes  in  estimating  and  measuring  values  of 
property.  They  may  take  into  account  the  business  of  the  corpora- 


458          LISTING  OF  PERSONS  AND  VALUATION. 

tion,  its  property,  the  value  of  its  actual  assets,  the  amount  and  na- 
ture of  its  present  and  contingent  liabilities,  the  amount  of  its  divi- 
dends and  the  market  value  of  its  shares  of  stock  in  the  hands  of 
individuals."  Now  I  do  not  desire  to  withdraw  in  any  degree  the 
concurrence  which  I  yielded  to  this  statement  when  the  case  was 
decided,  but  it  must  not  be  wrested  from  its  application  to  the  facts 
then  before  the  court  and  be  made  to  do  duty  on  a  different  and 
broader  field.  The  corporation  was  a  fire  insurance  company  with 
a  wide  range  of  contingent  liabilities.  It  had  made  no  statement  to 
the  assessors  and  had  left  them  to  their  own  resources.  Where  that 
is  so  what  are  the  officers  to  do?  Necessarily  they  must  resort  to 
such  means  as  remain  and  are  accessible,  and  in  that  emergency 
they  may  "look  at,"  "take  into  account,"  consider  the  market  value 
of  the  shares.  That  is  something  very  different  from  assessing  the 
share  stock  or  making  its  value  the  conclusive  measure  of  capital 
and  surplus.  Such  reference  is  simply  the  result  of  necessity,  a 
resort  to  the  poorest  means  of  information  and  to  the  most  deceptive 
and  treacherous  test,  because  the  better  means  or  truer  test  cannot 
be  obtained.  How  unreliable  the  test  of  share  value  may  be  through 
the  effect  of  gambling,  false  rumors,  scarce  money  and  panics,  Judge 
COMSTOCK  describes  in  his  opinion  to  which  I  have  already  re- 
ferred; and  yet  there  are  cases  in  which  it  furnishes  some  aid  to 
the  judgment  in  the  absence  of  accurate  knowledge.  It  is  such  cases 
that  the  courts  have  had  in  mind  when  justifying  a  reference  to  the 
stock  market,  and  not  those  in  which  the  amount  and  value  of  cap- 
ital and  surplus  was  fully  and  faithfully  disclosed.  And  so  I  think 
the  authorities  either  fairly  permit  or  fully  justify  the  conclusions 
which  I  have  reached  and  which  may  be  stated  with  reasonable  ac- 
curacy thus:  First,  the  subject  of  valuation  and  assessment  is 
never  the  share  stock,  but  always  the  company's  capital  and  sur- 
plus. Second,  such  capital  and  surplus  must  be  assessed  at  its  own 
value,  and  when  that  is  correctly  known  and  ascertained,  no  other 
value  can  be  substituted  for  it.  Third,  where  its  amount  and  value 
are  undisclosed  and  unknown  the  assessors  may  consider  the  mar- 
ket value  of  the  share  stock  and  the  general  condition  of  the  com- 
pany as  indicative  of  surplus  or  deficiency  and  of  the  probable 
amount  of  either.  Fourth,  they  may  further  resort  to  such  means 
of  information  when  the  amount  of  capital  and  surplus  is  disclosed 
but  the  assessors  have  sufficient  reason  to  disbelieve  the  statement, 
and  such  reason  is  founded  upon  facts  established  by  competent 
proof. 

If  these  conclusions  are  correct  it  will  follow  that  the  assessment 


PEOPLE  V.  COLE  MAX.  459 

complained  of  should  be  canceled.  The  corporation  presented  to 
the.  assessors  a  sworn  statement  of  its  assets  and  liabilities.  If  it 
be  true,  there  was  nothing  subject  to  assessment.  But  its  truth  is 
not  questioned,  and  there  is  not  the  least  reason  to  doubt  it.  The 
assessors  did  not  doubt  it;  they  merely  deemed  it  immaterial,  and 
so  testified  when  examined.  In  other  words,  knowing  with  cer- 
tainty tTie  value  of  one  thing,  they  claimed  the  right  to  affix  to  it 
the  larger  value  of  a  different  thing.  Authorized  only  to  tax 
against  the  company  its  capital  and  surplus,  they  assumed  the  right 
practically  to  tax  it  for  the  share  stock  held  by  individuals.  They 
have  not  in  terms  claimed  that  the  share  stock  is  the  subject  of  tax- 
ation, nor  has  the  counsel  who  represented  them  on  the  argument, 
but  both  have  maintained  and  defended  what  is  the  exact  and  com- 
plete equivalent.  The  right  asserted  is  a  discretion  in  the  assessors 
at  their  free  will  to  assess  corporations  upon  and  at  the  value  of 
their  capital  and  surplus,  or  upon  and  at  the  value  of  the  share 
stock  independently  of  established  facts  and  whenever  they  please. 
The  law  gives  them  no  such  discretion.  How  it  has  been  exercised 
and  how  destructively  to  the  rights  of  the  taxpayers  may  be  seen 
by  comparing  the  action  in  this  case  with  that  in  one  of  the  cases 
which  we  have  reviewed.  Where  the  share  stock  was  selling  at 
ninety,  and  so  below  par,  the  assessors  refused  to  take  that  value 
and  went  to  the  company's  books  in  search  of  a  larger  one,  which 
they  found  and  adopted.  Here,  where  the  actual  value  of  capital 
and  surplus  is  established  so  that  they  frankly  admit  the  fact,  they 
calmly  disregard  it  and  fly  to  the  larger  value  of  the  share  stock. 
The  statute  has  given  them  no  such  right.  They  are  not  lawless 
rovers,  wandering  among  corporations  at  will,  but  regular  officers 
bound  by  discipline  and  controlled  by  the  law,  and  whose  discretion 
exists  within  fixed  and  definite  limits. 

It  is  said,  and  it  is  true,  that  large  masses  of  personal  property 
escape  taxation,  and  the  owners  are  persistent  and  artful  and  not 
over  nice  in  their  efforts  to  avoid  a  just  share  of  the  public  bur- 
dens, and  so  we  should  uphold  faithful  assessors  in  every  attempt  to 
do  their  full  duty.  I  think  this  court  will  not  be  unmindful  of  the 
situation,  but  before  all  we  must  first  ascertain  and  then  obey  the 
law.  If  in  that  process  evils  result  or  are  disclosed,  the  remedy 
must  be  sought  elsewhere. 

It  follows  that  the  judgment  and  order  of  the  General  and  of  the 
Special  Term  should  be  reversed  and  the  assessment  against  the  re- 
lator  vacated  and  canceled,  without  costs. 

All  concur,  except  PECKHAM,  J.,  not  voting. 

Judgment  reversed. 


460          LISTING  OF  PERSONS  AND  VALUATION. 


PEOPLE  EX  REL.  MANHATTAN  RAILWAY  CO.  V.  BARKER. 

Court  of  Appeals  of  New  York.    June,  1895. 
146  New  York,  304. 

Cross-appeals  from  order  of  the  General  Term  of  the  Supreme 
Court  in  the  first  judicial  department,  made  April  11,  1895,  which 
reversed  an  order  of  Special  Term  vacating  and  setting  aside  an 
assessment  of  the  relator's  capital  stock  for  taxation  as  personal 
property  for  the  year  1894,  and  affirmed  the  proceedings  of  the  com- 
missioners of  taxes  and  assessments. 

The  facts,  so  far  ae  material,  are  stated  in  the  opinion. 

HAIGHT,  J.  On  the  8th  day  of  January,  1894,  the  commissioners 
of  taxes  and  assessments  of  the  city  of  New  York  assessed  the  relator, 
the  Manhattan  Railway  Company,  for  its  personal  property  at  the  sum 
of  $30,000,000.  In  the  month  of  April  thereafter  the  relator  filed 
a  statement  upon  one  of  the  blank  forms  furnished  by  the  department 
of  taxes  and  assessments  showing  its  condition  on  the  second  Monday 
of  January,  1894.  An  examination  of  the  treasurer  of  the  company 
was  thereupon  had  by  the  commissioners,  who  then  reduced  the 
assessment  and  fixed  it  at  the  sum  of  $17,860,712.  The  relator  there- 
upon procured  a  writ  of  certiorari  directed  to  the  tax  commissioners, 
commanding  them  to  make  return  of  the  proceedings  had  before  them 
to  the  Special  Term  of  the  Supreme  Court  in  order  that  a  review 
might  be  had  before  that  court.  Upon  the  returns  so  made  by  the 
commissioners  a  hearing  was  had  by  the  court  in  November,  1894 
upon  which  an  order  was  entered  vacating  the  assessment.  Upon  an 
appeal  to  the  General  Term  this  order  was  reversed  and  the  assessment 
as  made  reinstated. 

In  1893  some  controversy  arose  over  the  amount  of  the  assessment 
of  the  relator's  personal  property,  which  resulted  in  Mr.  Davies,  the 
attorney  for  the  relator,  addressing  a  letter  to  the  commissioners,  in 
which  he  states  that  Mr.  Gould  had  authorized  him  to  say  that 
if  the  assessment  did  not  exceed  $12,500,000  they  would  acquiesce. 
The  statement  made  in  1893  has  some  slight  variations  from  that 
made  in  1894,  but  is  substantially  the  same  with  the  exception  that 
the  amount  of  surplus  reported  in  1894  is  nearly  $1,000,000  in  excess 
of  that  of  1893,  so  that  if  the  commissioners  in  fixing  the  amount  of 
the  assessment  for  1894  acted  upon  the  statement  made  in  1893  as  com- 
pared with  that  made  in  1894,  and  the  letter  addressed  to  them  by  Mr. 
Davies,  they  could  not  well  have  increased  the  assessment  in  1894  more 
than  $1,000,000  or  thereabout?,  the  amount  of  the  increase  of  the 


MANHATTAN  RAILWAY  CO.  V.  BARKER.  461 

surplus  earnings  of  the  company.  This  would  have  made  in  round 
numbers  $13,500,000.  It  was,  however,  stated  upon  the  argument 
by  their  counsel  that  a  very  different  method  was  adopted  in  reaching 
the  amount  of  the  assessment;  that  in  the  statement  furnished  to 
the  commissioners  the  assessed  value  of  the  real  estate  had  been  given 
at  $7,323,200,  and  no  mention  had  been  made  as  to  its  actual  value, 
and  that  the  commissioners  were,  therefore,  left  to  judge  for  them- 
selves as  to  the  actual  value,  and  that  that  was  arrived  at  in  the  fol- 
lowing manner: 

Capital  stock    $29,925,200 

Bonded    indebtedness    21,163,035 

Surplus   5,326,432 

Gross  assets    $56.414,667 

DEDUCTIONS. 

Assessed  value  of  real  estate $7,323,200 

Stock  in  other  companies 7,075,200 

Mortgaged  indebtedness   21,163,035 

10  per  cent  of  the  capital  stock 2,992,520 

Total    .  , $38,553,955     $38,553,955 


Which    deducted    from    gross    assets,    leaves    amount 

assessable    $17,860,712 

The  actual  value  of  the  real  estate  as  assessed  is  thus 
ascertained  from  the  relator^s  statement  by  deducting 
from  the  gross  assets 56,414,667 

The  amount  of  its  personal  property,  consist- 
ing of  rolling  stock,  cash,  tools,  etc $3,748,315 

Stock  in  other  companies   7,075,200 

$10,823,315 


Leaving  as  the  actual  value  of  the  real  estate $45,591,352 

We  cannot  adopt  or  approve  of  this  method  of  ascertaining  the 
value  of  the  relator's  personal  property  or  of  the  actual  value  of  its 
real  estate.  The  method  is  erroneous  and  incorrect  for  various 
reasons.  Under  the  statute  the  capital  stock  of  every  company  liable 
to  taxation,  except  such  part  of  it  as  shall  have  been  excepted  in  the 
assessment  roll  or  shall  have  been  exempted  by  law,  together  with  its 
surplus  profits  or  reserve  funds  exceeding  ten  per  cent  of  its  capital 
after  deducting  the  assessed  value  of  its  real  estate  and  of  shares  of 
stock  in  other  corporations  actually  owned  by  such  company  which 
are  taxable  upon  their  capital  stock  under  the  laws  of  this  State,  shall 
be  assessed  at  its  actual  value  and  taxed  in  the  same  manner  as  other 


462          LISTING  OF  PERSONS  AND  VALUATION. 

personal  and  real  estate  of  the  county  (Laws  of  1857,  chap.  45G,  sec. 
3).  It  is  the  actual  value  of  its  capital  stock  and  not  the  market 
value  of  its  share  stock  that  is  to  be  assessed;  in  other  words,  it 
is  its  actual  tangible  personal  property  and  not  its  franchises.  Other 
statutes  provide  for  the  taxing  of  its  real  estate  and  franchises.  (Peo- 
ple ex  rel  The  Union  Trust  Co.  v.  Coleman,  126  N.  Y.  433.)  The 
real  property  of  the  relator  is  located  in  the  city  of  New  York 
under  the  eye  and  subject  to  the  inspection  of  the  commissioners. 
Under  the  Revised  Statutes  they  are  required  to  assess  it  at  its  just 
and  full  value  as  they  would  appraise  the  same  in  payment  of  a 
just  debt  due  from  a  solvent  debtor.  (1  R.  S.  393,  §  17.)  And 
under  the  Consolidation  Act  for  the  city  of  New  York  it  shall  be 
assessed  "at  the  sum  for  which  such  property  under  ordinary  cir- 
cumstances would  sell."  The  value  of  property  is  determined  by 
what  it  can  be  bought  and  sold  for,  and  there  can  be  no  doubt  but 
that  these  various  expressions  used  in  the  statutes  all  are  intended 
to  mean  the  actual  value  of  the  property.  The  commissioners  are 
sworn  officers,  and  as  such,  in  absence  of  evidence  to  the  contrary, 
are  presumed  to  have  done  their  duty.  They  have  assessed  the  real 
estate  at  $7,323,200,  and  yet,  under  the  method  presented  by  their 
counsel  for  ascertaining  the  value  of  the  relator's  personal  property, 
they  now  estimate  the  actual  value  of  the  real  estate  to  be  $45,591,- 
352.  We  are  aware  that  it  is  generally  understood  that  in  many 
localities  throughout  the  State  assessors,  in  violation  of  their  duties, 
assess  the  real  estate  in  their  localities  at  a  sum  less  than  its  actual 
value,  but  in  the  absence  of  evidence  that  this  has  been  done  by  the 
commissioners  of  taxes  and  assessments  in  the  city  of  New  York,  we 
cannot  assume  that  they  have  so  transgressed  for  the  purpose  of 
approving  of  their  work  in  this  case.  Real  property  cannot  well  be 
covered  up  or  hid  from  view.  Its  value  can  readily  be  ascertained. 
It  should  be  assessed  upon  estimates  directly  made  as  to  its  value  and 
not  upon  presumptions  figured  upon  intricate  theories. 

Again,  the  method  presented  by  respondents'  counsel  involves  the 
presumption  that  the  indebtedness  of  the  corporation  represents 
property  to  the  amount  of  such  indebtedness  in  addition  to  that 
represented  by  its  capital  stock.  This  presumption  cannot  be 
indulged.  The  indebtedness  may  have  been  incurred  for  operating 
expenses,  wages  of  employees  and  material  used  up.  It  may  represent 
property  worn  out,  decayed  or  burned  up  during  the  existence  of 
the  corporation.  Presumptions  that  arise  from  the  earnings  of  a 
corporation  and  those  that  arise  from  its  indebtedness  are  quite 
different.  Too  many  of  the  railroads  of  the  country  are  in  the 


MANHATTAN  RAILWAY  CO.  V.  BARKER.  463 

hands  of  receivers  to  warrant  a  judicial  presumption  that  the  bonded 
or  other  indebtedness  of  each  road  represents  its  actual  tangible 
property  in  addition  to  that  represented  by  its  capital  stock. 

And  again,  the  method  proposed  necessarily  includes  the  value  of 
the  franchises  possessed  by-  the  corporation  which,  as  we  have  seen, 
cannot  properly  be  included  in  the  assessment  under  review. 

Whilst  the  assessment  made  cannot  be  sustained,  we  think  that  the 
relator  ought  not  to  escape  a  proper  assessment  for  the  property.  It 
is  true  that  the  commissioners  are  not  free  to  capriciously  disregard 
the  evidence  and  emancipate  themselves  from  all  restrictions  and 
rules,  however  fundamental ;  they  are  not  bound  by  statements  that 
•are  contradicted  and  which  they  disbelieve,  where  good  reasons 
exist  for  such  disbelief.  (The  People  ex  rel.  Union  Trust  Co.  v. 
Coleman,  supra;  The  People  ex  rel.  Edison  El.  Co.  v.  Barker,  139 
X.  Y.  55-67 ;  The  People  ex  rel.  Manh.  F.  Ins.  Co.  v.  The  Comrs.  of 
Taxes,  76  id.  64;  The  People  ex  rel.  Gen.  EL  Co.  v.  Barker,  141  id. 
251;  People  ex  rel.  Westchester  F.  Ins.  Co.  v.  Davenport,  91  id.  574.) 
The  letter  of  Mr.  Davies  in  1893  to  the  effect  that  if  the  assessment 
was  made  at  $12,500,000  the  company  would  acquiesce,  having  been 
written  for  the  purpose  of  a  settlement,  and  an  adjustment  of  the  con- 
troversy then  existing,  could  not  properly  be  adopted  by  the  com- 
missioners as  the  basis  of  an  assessment  for  subsequent  years.  Still, 
at  the  same  time,  it  might  well  create  a  suspicion  as  to  the  truthfulness 
of  a  statement  made  the  year  following,  showing  that  so  far  as  the 
property  of  the  corporation  was  concerned,  aside  from  its  franchises, 
it  was  insolvent  to  the  extent  of  $3,000,000.  Aside  from  this,  there 
exists  the  fact  that  the  net  earnings  of  the  corporation  for  the  year 
were  such  as  to  enable  it  to  pay  the  interest  upon  its  indebtedness  and 
a  dividend  upon  its  thirty  millions  of  capital  stock  of  six  per  cent 
and  still  have  a  surplus  bordering  upon  a  million  dollars.  These 
facts  fully  justified  the  commissioners  in  discrediting  the  statement 
made  to  them  by  the  relator.  Personal  property,  unlike  real  property, 
may  not  always  be  readily  found  and  assessments  thereof  by  assessors 
are  often  attended  with  difficulties.  For  these  reasons  more  latitude 
necessarily  should  be  given  assessors  in  ascertaining  and  determining 
the  amount  and  value  of  personal  property.  Presumptions  to  some 
extent  should  be  indulged.  For  this  reason  the  earnings  of  a  cor- 
poration may  be  considered  by  the  assessors,  and  where  they  are 
such  as  to  enable  the  company  to  pay  its  running  expenses,  neces- 
sary repairs,  interest  upon  its  indebtedness  and  declare  a  dividend 
of  six  per  cent  and  still  have  a  surplus,  it  may  be  assumed  that  its 
capital  stock  remains  unimpaired  and  that  there  are  assets  over  and 


464          LISTING  OF  PEESONS  AND  VALUATION. 

above  sufficient  to  pay  its  outstanding  indebtedness.     (People  ex  rel. 
The  Equitable  Gas  Light  Co.  v.  Barker,  144  N.  Y.  94.) 

This  method,  however,  may  include  the  value  of  the  franchises 
which  should  be  deducted  in  order  to  determine  the  amount  of 
property  liable  for  assessment.  Such  value  has  not  been  given  and  we 
are  consequently  left  without  the  evidence  at  hand  upon  which  to 
determine  the  actual  value  of  the  personal  property  under  the  pre- 
sumptions arising  from  the  facts  mentioned.  It  may  turn  out  that 
the  capital  stock  represents  property  to  the  amount  thereof  in  addi- 
ton  to  the  franchises;  that  the  stock  issued  to  the  stockholders  of 
the  New  York,  Metropolitan  and  Suburban  companies  represented 
money  actually  paid  by  the  stockholders  of  those  companies  for  real 
estate  and  the  building  construction  and  equipments  of  the  elevated 
railroads  thereon.  Should  such  be  the  case,  the  presumption  from 
the  earnings  of  the  company  would  be  permissible,  that  the  capital 
stock  remained  unimpaired,  representing  property  over  and  above 
the  franchises,  to  the  amount  thereof,  and  in  addition,  sufficient  to 
pay  the  outstanding  indebtedness.  Upon  this  basis  the  assessable 
personal  property  could  be  determined  by  adding  to  the  capital  stock 
issued  the  surplus  still  of  hand  not  invested  in  the  real  and  personal 
property  of  the  company  and  deducting  therefrom  the  assessable 
value  of  the  real  estate,  the  stock  in  other  companies  and  the  ten 
per  cent  allowed  by  statute.  The  result  would  be  as  follows  : 

Capital  stock    $29,925,200 

Surplus  on  hand  in  cash 1,382,838 


Total    $31,308,038 

Real  estate    $7,323,200 

Stock  in  other  companies 7,075,200 

Ten  per  cent  of  capital 2,992,520 

17,390,920 


Amount   assessable    $13,917,118 


The  General  Term  was  of  the  opinion  that  this  assessment  could 
be  sustained  upon  the  authority  of  The  People  ex  rel.  The  Equitable 
Gas  Light  Co.  v.  EarTcer  (144  N".  Y.  94).  The  difficulty  is  that  in 
that  case  the  value  of  the  patents  and  franchise  was  found  to  be 
$500,000,  whilst  in  this  case  we  have  no  value  given  to  the  fran- 
chises or  facts  appearing  from  which  such  value  can  be  determined. 

The  statute  provides  that  upon  the  return  of  a  writ  of  certiorari 
to  review  an  assessment  the  court  shall  have  power  to  order  the 


PEOPLE  EX  REL.  MIXER  V.  SALOMON.  4t>5 

assessment,  if  illegal,  to  be  stricken  from  the  roll,  or,  if  erroneous  or 
unequal,  to  order  a  re-assessment  of  the  property,  etc.  (Laws  of 
1880,  ch.  269,  §  4.)  The  assessment  in  this  case  is  not  illegal;  it  is 
merely  erroneous.  A  re-assessment  should,  therefore,  be  ordered. 

The  order  of  the  General  Term  should  be  reversed  and  that  of  the 
Special  Term  modified  so  as  to  vacate  the  assessment  made  and 
order  a  re-assessment  by  the  commissioners,  without  costs  of  this 
appeal  to  either  party. 

All  concur,  except  O'BeiEN,  J.,  not  voting. 

Ordered  accordingly. 


IX.    EQUALIZATION. 
PEOPLE  EX  REL.  MINER  V.  SALOMON. 

Supreme  Court  of  Illinois.    January,  1868. 
46  Illinois,  333. 

Mr.  Chief  Justice  BREESE  delivered  the  opinion  of  the  court. 

This  was  an  application  by  the  Auditor  of  Public  Accounts  of 
this  State,  for  a  mandamus  against  the  County  Clerk  of  Cook  county, 
to  compel  him  to  extend  on  the  books  of  the  collectors  of  that  county, 
the  equalized  tax  ordered  by  the  State  Board  of  Equalization. 

By  the  alternative  writ  the  clerk  was  commanded,  in  preparing 
the  books  for  the  collectors  of  taxes,  to  provide  therein  five  columns 
for  values,  specifying  what  the  first  and  second  columns  should  con- 
tain; and  that  he  should  extend  in  separate  columns,  State,  county 
and  all  other  taxes,  against  the  equalized  valuation  according  to  the 
Auditor's  certificate  which  the  clerk  had  received,  in  which  was  set 
forth  the  action  of  the  Board  of  Equalization  in  respect  to  Cook 
county,  and  in  all  cases  of  extension,  when  the  equalized  valuation 
should  happen  to  be  fractional,  to  reject  all  fractions  falling  below 
fifty  cents;  and  that  he  should  extend  all  fractions  of  fifty  cents  or 
more,  as  one  dollar;  and  that  when  the  collector's  books  were  com- 
pleted, he  report  to  the  Auditor  the  valuation  as  equalized,  and  the 
amount  of  State,  county  and  other  taxes  charged  thereon,  and  that 
he  make  to  each  collector  a  certificate  of  the  rate  of  deduction  or 
addition  determined  by  the  Board  of  Supervisors  in  the  township  to 
which  such  book  should  pertain,  as  required  by  sections  eleven  and 
fifteen,  of  the  act  entitled  "An  act  to  amend  the  Revenue  Laws  and 
30 


466          LISTING  OF  PERSONS  AND  VALUATION. 

to  establish  a  State  Board  for  the  Equalization  of  Assessments," 
approved  March  8,  1867,  and  to  do  and  perform  all  such  acts  and 
things  in  the  premises  as  the  law  requires,  or  appear  before  the 
Supreme  Court  forthwith,  to  show  cause  why  he  refused  so  to  do. 

Accompanying  the  petition  of  the  Auditor  were  the  proceedings  of 
the  Board  of  Equalization,  and  this  notice,  directed  to  the  clerk,  and 
issued  from  the  office  of  the  Auditor,  and  bearing  date  October  14th, 
1867:  "Sir: — You  are  hereby  notified  that  the  State  Board  of 
Equalization,  at  their  session  begun  on  the  first  Tuesday,  being  the 
first  day  of  October,  1867,  determined  the  rate  of  24  per  cent  to  be 
added  to  the  assessed  valuation  of  all  property  listed  for  taxation  in 
the  County  of  Cook  for  the  year  1867.  You  will,  therefore,  in 
pursuance  of  law,  proceed  to  extend  the  equalized  valuation  of  all 
property  so  listed,  by  increasing  the  valuation,  as  equalized  by  the 
Board  of  Supervisors,  at  the  rate  of  24  per  cent." 

The  clerk  made  a  formal  and  elaborate  return  to  the  writ,  in 
which  he  takes  exception  to  the  action  of  the  board  in  several  par- 
ticulars, but  admits  he  has  disregarded  the  action  of  the  board,  and 
the  "request"  of  the  Auditor  to  extend  the  taxes  upon  "the  pre- 
tended" equalization  made  by  that  board,  for  the  reason,  that  the 
act  of  the  General  Assembly,  creating  the  board  is  unconstitutional 
and  void,  because  it  undertakes  to  establish  a  mode  of  ascertaining 
the  value  of  property  subject  to  taxation,  in  violation  of  the  consti- 
tution, and  their  proceedings  were  not  in  conformity  with  that  act, 
but  so  far  as  related  to  the  County  of  Cook,  were  an  arbitrary  impo- 
sition of  24  per  cent  to  the  assessed  value  of  property  in  that  county, 
without  an}'  ascertainment  of  its  real  or  proportionate  value,  and  he 
prays  the  judgment  of  this  court  whether  he  ought  to  extend  such 
taxes  upon  such  pretended  equalization  of  the  property  of  that 
county. 

To  this  return  the  relator  demurred,  and  there  was  a  joinder  in 
demurrer. 

The  small  proportion  which  the  actual  revenue  of  the  State  bore 
to  the  real  value  of  the  property  of  the  State,  under  the  operation 
of  laws,  which,  pretending  to  carry  out  the  behests  of  the  constitution, 
that  all  taxes  should  be  levied  by  valuation,  so  that  every  person  and 
corporation  should  pay  a  tax  in  proportion  to  the  value  of  his  or 
her  property,  to  be  ascertained  by  some  person  or  persons  to  be  elected 
or  'appointed  in  such  manner  a?  the  general  assembly  might  direct, 
created  widespread  alarm  and  dissatisfaction,  rendering  it  an  abso- 


PEOPLE  EX  REL.  MIXER  V.  SALOMON.  467 

lute  necessity  that  some  effective  mode  should  be  devised,  by  which 
this  constitutional  provision  might  be  carried  out  in  its  true  spirit. 

The  want  of  such  a  mode  may  be  well  admitted,  when  the  re- 
turns of  the  assessors  of  the  different  counties  are  examined,  which 
were  made  so  late  as  1867. 

We  have  extracted  from  the  table  accompanying  the  report  of  the 
board  of  equalization,  some  startling  cases  of  the  gross  inequality 
which  prevailed  up  to  the  time  of  the  meeting  of  the  board.  Reports 
of  the  Auditor  of  Public  Accounts,  made  apparent  the  same  griev- 
ances, and  that  body  would  have  been  recreant  in  their  duty  if  they 
had  not  provided  a  proper  correction. 

These  gross  inequalities  pervade  the  table  of  assessments  and  that 
also  shows,  while  the  property  of  the  southern  and  eastern  counties 
in  the  State  is  assessed  at  something  near  its  actual  value,  that  of 
the  northern  and  western  and  central  counties  are  far  below  it.  These 
inequalities  permeated  the  whole  system,  and  this  wholesome  pro- 
vision of  the  constitution  rendered  practically  inoperative;  and  the 
same  was  the  case  with  real  property. 

If  the  legislature  have  no  power,  under  the  constitution,  to  provide 
a  corrective  for  these  monstrous  evils,  inflicting  injustice  upon  the 
individual  property  owner,  and  robbing  the  treasury  of  the  State  of 
its  just  revenues,  then,  indeed,  it  must  be  conceded  it  is  a  feeble  instru- 
ment, and  the  sooner  it  is  overhauled  and  its  weak  places  strengthened, 
the  better. 

But  these  evils,  grievous  as  they  are,  and  even  if  tenfold  greater, 
furnish  no  apology  to  the  legislature  for  a  law  to  correct  them,  unless 
such  law  shall  be  within  their  constitutional  competency  to  enact. 
A?  we  have  said  in  several  cases,  the  framers  of  our  constitution  have 
taken  great  pains  to  affirm  the  principles  of  equality  and  uniformity, 
as  indispensable  to  all  legal  taxation,  whether  general  or 'local;  and 
if  the  act  of  Feb.  8,  1867,  eschews  those  principles  or  violates  them, 
it  must  be  condemned,  however  praiseworthy  may  have  been  the  object, 
and  however  pressing  the  necessity.  The  great  central  idea  of  the 
constitution  and  of  its  framers,  was  not  a  system  of  revenue  based  on 
the  valuation  of  property,  but  uniformity  and  equality  in  the  assess- 
ment of  the  tax  upon  it  when  valued,  so  that  every  person  should  pay 
a  tax  in  proportion  to  it.  That  is  the  leading  idea.  Bureau  Co.  v.  C., 
B.  cf-  Q.  R.  R.  Co.,  44  111.  229. 

Is  that  object  infringed  upon  by  the  act  in  question  ?  Has  not  the 
valuation  of  property  in  Cook  county  been  ascertained  by  persons 
appointed  by  the  general  assembly  ?  and  was  not  the  manner  of  their 


4U8          LISTING  OF  PERSONS  AND  VALUATION. 

appointment  an  open  question  with  the  legislature?  How  have  they 
proposed  in  their  various  revenue  laws,  to  execute  the  powers  con- 
ferred ?  Whether  they  have  enacted  it  wisely  or  not,  is  not  the  ques- 
tion ;  it  is  a  question  of  power  only,  and  must  be  tested  by  the  consti- 
tution alone. 

Keeping  in  view  that  the  central  idea  of  section  2,  article  9,  of  the 
constitution  is  uniformity  of  taxation,  and  that  exact  uniformity  is, 
under  no  system,  practically  attainable,  an  approximation  to  it  is  all 
that  can  be  demanded. 

When  property  is  valued  by  persons  appointed  or  elected  for  that 
purpose,  the  injunction  of  the  constitution  is  thus  far  beyond.  Why 
are  values  to  be  ascertained?  So  that  every  person  and  corporation 
shall  pay  a  tax  in  proportion  to  value.  That  is  the  sole  object  of 
valuation.  How  is  the  fact  to  be  ascertained,  that,  in  levying  a  tax 
on  this  valuation,  which  every  person  has  been  required  to  pay,  is 
in  proportion  to  its  ascertained  value  ?  That  is  the  important  question. 

While  it  is  admitted  that  it  is  not  practicable  to  ascertain  the  pre- 
cise value  of  taxable  property,  and  while  the  real  object  is  to  assess 
all  property  by  the  same  standard,  and  as  near  its  real  value  as  is 
possible  under  all  circumstances,  every  means  the  legislature  may 
adopt  to  arrive  at  this  standard,  if  not  prohibited  by  the  constitution, 
must  be  within  their  constitutional  competency. 

It  may  be  asked,  how  shall  the  value  be  ascertained  by  the  persons 
appointed  or  elected  for  that  purpose  ?  The  constitution  provides  no 
mode.  None  of  the  details  are  found  there.  The  great  principle 
only  is  announced,  that  valuation  shall  be  the  basis,  in  order  to 
produce  uniformity  in  results,  all  else  being  left  to  the  wisdom  of 
the  legislature.  Whatever  they  may  do,  whatever  mode  they  may  pre- 
scribe, which  does  not  overleap  this  boundary,  must  be  legitimate. 

It  is  seriously  contended,  that  the  mode  prescribed  by  the  eighth 
section  of  the  act  in  question  is  not  within  this  boundary,  but  outside 
of  it,  and  consequently  null  and  void. 

That  section  is  as  follows: 

"In  equalizing  the  value  of  personal  property  in  the  several 
counties  said  board  shall  cause  to  be  added  together  the  average  values 
of  each  kind  of  domestic  animals  and  enumerated  articles  in  each 
county,  and  the  sum  so  obtained  as  compared  with  the  added  general 
averages  of  the  same  items  throughout  the  State,  shall  be  held  by 
said  board  to  indicate  the  proportion  which  the  whole  assessment  of 
personal  property  in  each  county  bears  to,  the  whole  assessment  of 
personal  property  throughout  the  State,  and  said  personal  property 
shall  be  equalized  by  said  board  in  the  manner  hereinafter  provided 


PEOPLE  EX  REL.  MIXER  V.  SALOMON.  469 

for  equalizing  real  property.  Real  property  shall  be  equalized  by 
adding  to  the  aggregate  assessed  vahie  thereof  in  every  county  in 
which  said  board  may  believe  the  valuation  to  be  low,  such  per  centum 
as  will  raise1  the  same  to  its  proportionate  value,  and  by  deducting 
from  the  aggregate  assessed  value  thereof  in  every  county  in  which  the 
said  board  may  believe  the  valuation  to  be  too  high,  such  per  centum 
as  will  reduce  the  same  to  its  proper  value.  When  the  relative  valua- 
tions of  real  and  personal  property  shall  have  been  considered  sepa- 
rately, said  board  shall  combine  the  results  in  such  manner  as  may  be 
deemed  equitable,  and  determine  a  uniform  rate  per  cent,  to  be  added 
to,  or  deducted  from,  both  classes  of  property  in  each  county,  which 
rate  per  cent,  shall  in  all  cases  be  even  and  not  fractional :  Pro- 
vided, that  nothing  herein  contained  shall  be  construed  as  interfering 
in  any  manner  with  the  laws  now  in  force  in  regard  to  the  equalization 
of  assessments  as  between  the  different  townships,  by  the  board  of 
supervisors  in  counties  adopting  the  township  organization.''" 

On  this  section  hinges  the  argument  of  respondent's  counsel,  and 
rightly  so,  for  by  it  is  developed,  fully,  the  system  designed  by  the 
legislature  for  the  purpose  of  approximating  and  carrying  out  the 
dominant  idea  of  uniformity. 

They  say  this  mode  of  ascertaining  the  value  of  taxable  property 
conflicts  with  the  constitution,  because  it  adopts  a  standard  of  value 
as  a  basis  of  taxation  different  from  the  one  prescribed  by  the  con- 
stitution; and  that  the  general  assembly  had  no  power  to  provide 
for  an  equalization  of  assessments  for  any  other  purpose  than  to  ascer- 
tain and  fix  the  true  value  of  the  property  assessed.  And  they  say 
further,  that  it  has  no  authority  to  equalize  the  assessments  of  the 
several  counties  by  an  arbitrary  rule,  which  must  produce  great 
inequalities  between  the  assessment  of  real  and  personal  property, 
and  which  totally  disregards  the  rights  and  interests  of  the  indi- 
vidual tax  payer,  who  alone  is  affected  by  it. 

This  error  of  the  argument  is  apparent.  It  proceeds  on  the  assump- 
tion that  a  standard  of  value  has  been  adopted  as  a  basis  of  taxation, 
not  recognized  by  the  constitution,  and*  that  the  legitimate  purpose 
of  a  board  of  equalization  could  only  be  to  ascertain  and  give  the  true 
value,  of  the  property  assessed. 

Such,  we  think,  was  not  the  purpose.  The  true  value  of  property, 
by  no  system  yet  devised  by  the  wit  of  man,  can  be  exactly  ascertained. 
An  approximate  value  having  been  returned  by  assessors,  it  is  the  clear 
object  of  this  section  so  to  equalize  the  valuations  among  the  several 
counties  of  the  State  as  to  approximate,  not  to  reach,  for  that  is 
also  impracticable,  a  perfect,  but  an  attainable  degree  of  uniformity, 


470          LISTING  OF  PERSONS  AND  VALUATION. 

and  thus  carry  out  the  great  and  central  requirement  of  the  con- 
stitution, and  this  by  the  application  of  the  doctrine  of  averages,  a 
doctrine  which  enters  into  all  kinds  of  business,  into  all  complicated 
affairs  of  life,  and  which  has  received  the  sanction  of  the  learned  and 
the  wise  of  every  civilized  nation. 

What  is  the  object  of  this  provision  in  the  constitution?  The 
answer  is,  to  raise  a  revenue  for  the  support  of  the  government.  On 
what  shall  it  be  raised?  On  property.  In  what  manner?  By  valu- 
ing the  property  of  the  several  counties,  through  the  agency  of  per- 
sons elected  or  appointed  for  that  purpose.  On  what  principle  must 
the  tax  be  levied?  On  the  principle  of  uniformity,  by  which  all  the 
citizens  of  all  the  counties  shall  pay  a  tax,  not  in  precise  proportion 
to  the  value  of  their  property,  but  as  nearly  so  as  by  the  application 
of  just  principles  to  the  valuation  of  it  will  be  most  likely  to  produce 
the  desired  result. 

There  is  nothing  in  the  constitution  expressly  prohibiting  a  revi- 
sion of  valuations  and  assessments,  and  that  principle  has  been  in- 
corporated into  our  revenue  system  by  all  the  revenue  laws  passed 
since  the  adoption  of  the  present  constitution. 

In  counties  adopting  township  organization,  ample  provision  is 
made  for  examining  the  assessment  rolls  of  the  different  assessors  in 
the  several  towns  of  the  county,  by  the  Board  of  Supervisors  of  the 
county,  in  order  to  ascertain  whether  the  valuation  in  any  one  town 
or  district  bears  just  relation  to  that  of  all  the  other  towns  and  dis- 
tricts in  the  county,  and  that  Board  is  fully  authorized  to  increase 
or  diminish  the  aggregate  valuation  of  real  estate  in  any  town  or 
district,  by  adding  or  deducting  such  sum  upon  the  hundred  as  may, 
in  their  opinion,  be  necessary  to  produce  a  just  relation  between  all 
the  valuations  of  real  estate  in  the  county,  but  in  no  instance  to  re- 
duce the  aggregate  valuation  of  all  the  towns  and  districts  below  the 
aggregate  as  made  by  the  assessors.  Sec.  15,  Sess.  Laws  1861, 
page  243. 

What  is  this  but  a  board  of  equalization  on  a  limited  scale?  It 
will  not  be  contended  that  the  County  Board  of  Supervisors  are  per- 
sons elected  or  appointed  for  the  purpose  of  valuing  property.  Not 
at  all.  Yet  it  has  never  been  questioned  that  the  power  thus  con- 
ferred upon  it  has  been  legally  conferred.  It  was  foreseen  at  the 
outset,  by  the  legislature,  that  in  counties  having  as  many  assessors 
as  there  were  towns  within  it,  there  would  be  great  discrepancies  in 
the  assessments.  That  common  horses,  in  town  A,  might  be  valued  at 
fifty  or  one  hundred  per  cent.,  or  more,  above  the  same  description  of 
horses  in  town  B,  and  even  at  a  greater  disproportion  in  town  C. 


PEOPLE  V.  SA(  1JAMKXTO  COUNTY.  471 

What  more  just  and  equitable  than  that  power  should  be  reposed  some- 
where to  correct  this,  and  by  raising  up,  or  dropping  down,  or  mak- 
ing an  average  among  the  several  towns,  a  true  valuation  might  be 
approximated.  The  object  and  purpose  of  the  Board  of  Equalization 
is  the  same,  with  this  difference,  that  they  are  required  to  equalize 
valuations  between  the  several  counties  of  the  State.  They  are  both 
parts,  and  very  important  parts,  of  our  revenue  system,  which,  in- 
culcating valuation,  at  the  same  time  does  not  lose  sight  of  the  domi- 
nant principle  of  equality  and  uniformity.  The  title  of  the  bill  is 
an  act  to  amend  the  revenue  laws.  It  is  a  step  in  the  right  direc- 
tion, and  although  individual  cases  of  hardship  and  injustice  may 
happen  under  it,  when  first  put  in  operation,  its  object  and  purposes 
commending  it  so  much  to  the  respect  of  the  people,  such  cases  will  not 
be  received  as  arguments  against  the  validity  of  the  law,  or  even  its 
policy. 

We  perceive  nothing  in  the  act  conflicting  with  section  two  of 
article  nine  of  the  constitution.  Some  of  its  details  might,  no  doubt, 
be  improved,  as  they  will  be,  by  future  legislation,  but  the  principle 
on  which  it  is  based  commends  it  to  our  best  judgment.  Let  a  per- 
emptory mandamus  issue. 

WALKER  J.  dissenting. 

Mandamus  awarded. 


PEOPLE  V.  SACRAMENTO  COUNTY. 

Supreme  Court  of  California.    July,  1881. 
59  California  821. 

Application  for  a  writ  of  certiorari. 

McKixsTEY,  J. : 

This  proceeding  was  brought  to  test  the  jurisdiction  of  the  Boards 
of  Supervisors  of  the  several  counties,  through  which  run  railroads 
operated  in  more  than  one  county,  to  raise  or  lower  the  assessments 
placed  upon  the  property  of  such  roads  by  the  State  Board  of  Equali- 
zation. 

In  Section  9,  Article  xiii  of  the  constitution,  it  is  provided :  "The 
Boards  of  Supervisors  of  the  several  counties  of  the  State  shall  con- 
stitute Boards  of  Equalization  for  their  respective  counties,  whose 
duty  it  shr.-l  be  to  equalize  the  valuation  of  the  taxable  property  in 
the  county  for  the  purpose  of  taxation."  Except  with  reference  to 
its  action  in  respect  to  the  property  of  railroads  operated  in  more 


472  LISTING  OF  PERSONS  AND  VALUATION. 

than  one  county,  the  duty  of  the  State  Board  of  Equalization,  like 
that  of  the  County  Board,  is  such  as  its  name  imports — to  equalize 
valuations  already  made.  The  State  Board  equalizes  values  as  be- 
tween different  counties.  The  County  Board  equalizes  valuations  as 
between  different  parcels  or  articles  of  property  in  the  same  county. 
(Wells  Fargo  &  Co.  v.  State  Board  of  Equalization,  56  Cal.  194.) 
The  power  of  the  County  Boards  is  limited  to  the  equalization  of  the 
valuations  of  the  local  Assessors. 

With  the  exception  noted,  the  State  Board  of  Equalization  has  no 
original  power  of  assessment.  But  it  is  the  manifest  intent  of  the 
Constitution  that  the  valuation  of  the  railroad  property,  mentioned 
in  Section  10  of  Article  xiii,  shall  be  finally  fixed  and  determined  by 
the  State  Board  of  Equalization — the  State  Board  has  the  exclusive 
power  to  assess  and  equalize  its  value.  Thus  the  Constitution  fur- 
nishes a  system  for  the  assessment  of  railroads,  operated  in  more  than 
one  county,  which  is  separate  and  distinct  from  that  provided  for  the 
assessment  of  other  property. 

The  system  is  prescribed  in  Section  10  of  Article  xiii :  "The  fran- 
chises, roadway,  roadbed,  rails,  and  rolling  stock  of  all  railroads 
operated  in  more  than  one  county  in  this  State  shall  be  assessed  by 
the  State  Board  of  Equalization,  at  their  actual  value,  and  the  same 
shall  be  apportioned  to  the  counties,  cities  and  counties,  cities,  towns, 
townships,  and  districts  in  which  such  railroads  are  located,  in 
proportion  to  the  number  of  miles  of  railway  laid  in  such  counties, 
cities  and  counties,  cities,  towns,  townships,  and  districts." 

It  cannot  be  doubted  (if  the  Constitution  is  constitutional)  that 
the  State  Board  of  Equalization  has  thus  power  to  assess  the  rail- 
road property  mentioned  in  section  10  of  article  xiii,  and  to  appor- 
tion the  same  to  the  several  counties,  etc.  The  portion  of  the  sec- 
tion quoted  is  clearly  self-executing.  We  are  at  a  loss  to  imagine 
how  any  statute  could  make  the  duty  of  the  State  Board  any  clearer 
than  does  this  distinct  and  positive  mandate  of  the  Constitution.  If 
any  doubt  could  possibly  be  built  on  the  words  cited,  it  would  be  dis- 
pelled by  the  first  clause  of  the  same  section:  "All  property,  except 
as  hereinafter  in  this  section  provided,  shall  be  assessed  in  the  county, 
city  and  county,  town,  township  or  district  in  which  it  is  situated, 
in  the  manner  prescribed  by  law."  Thus  by  the  very  language  of  the 
Constitution,  all  other  but  the  railroad  property  mentioned  must 
be  assessed  by  the  local  assessors,  in  the  manner  prescribed  by  statute ; 
the  railroad  property  must  be  assessed  in  the  manner  prescribed  by 
the  section  of  the  Constitution. 

If  legislation  is  necessary  (and  it  be  true  that  none  has  been  had) 


PEOPLE  V.  SACEAMENTO  COUNTY.  473 

to  furnish  machinery  for  transmitting  to  the  several  counties  official 
notice  of  the  apportionment  made  by  the  State  Board  of  Equalization, 
or,  if  the  statute  in  that  regard  has  not  been  complied  with  by  the 
State  Board,  or,  if  the  tax  cannot  be  legally  collected  for  want  of  any 
appropriate  legislation,  no  one  of  such  defects  or  errors  authorizes 
the  Board  of  Supervisors  to  add  to  or  deduct  from  the  valuation  of 
the  State  Board.  Nay,  even  if  it  should  be  admitted  (and  we  do  not 
admit  it),  that  the  provision  of  the  State  Constitution  which  at- 
tempts to  confer  on  the  State  Board  of  Equalization  the  exclusive 
power  of  assessing  certain  property,  and  of  apportioning  the  tax  there- 
on, is  invalid,  because  in  conflict  with  some  provision  of  the  Con- 
stitution of  the  United  States,  this  invalidity  would  not  increase  the 
jurisdiction  of  the  Supervisors  as  a  Board  of  Equalization.  In  such 
case  the  attempted  valuation  by  the  State  Board  would  be  void.  Could 
the  Board  of  Supervisors  make  a  valid  assessment  by  reducing  the 
amount  of  the  invalid  assessment  made  by  the  State  Board  of  Equali- 
zation ? 

The  order  of  respondents  purporting  to  reduce  assessments,  as  set 
forth  in  the  petition  herein,  is  annulled. 

MYRICK,  SHARPSTEIN,  Ross,  THORNTON,  and  McKEE,  JJ.,  and 
MORRISON,  C.  J.,  concurred. 


CHAPTER  XL 
THE  COLLECTION  OF  THE  TAX. 

I.    DISTRESS  AND  SALE. 
McMILLEN  V.  ANDERSON. 

Supreme  Court  of  the  United  States.    October,  1877. 
95  United  States,  87. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 

The  defendant,  tax  collector  of  the  State  of  Louisiana  for  the  parish 
of  Carroll,  seized  property  of  the  plaintiff,  and  was  about  to  sell  it  for 
the  payment  of  the  license  tax  of  one  hundred  dollars  for  which  the 
latter,  as  a  person  engaged  in  business,  was  liable.  In  accordance 
with  the  laws  of  Louisiana,  plaintiff  brought  an  action  in  the  proper 
court  of  the  State  for  the  trespass,  and  in  the  same  action  obtained  a 
temporar}  injunction  against  the  sale  of  the  property  seized.  Defend- 
ant pleaded  that  the  seizure  was  for  taxes  due,  and  that  his  duty  as 
collector  required  him  to  make  it.  On  a  full  hearing,  the  court  sus- 
tained the  defence,  and  gave  a  judgment  under  the  statute  against 
plaintiff  and  his  sureties  on  the  bond  for  double  the  amount  of  the 
tax,  and  for  costs. 

Plaintiff  thereupon  took  an  appeal  to  the  Supreme  Court  of  Louisi- 
ana, and  in  his  petition  for  appeal  alleged  that  the  law  under  which 
the  proceedings  of  defendant  were  had  is  void,  because  it  is  in  con- 
flict with  the  Constitutions  of  Louisiana  and  of  the  United  States, 
and,  as  he  now  argues,  is  specifically  opposed  to  the  provision  of  the 
Fourteenth  Amendment  of  the  latter,  which  declares  that  no  State 
shall  deprive  any  person  of  life,  liberty,  or  property  without  due 
process  of  law. 

The  judgment  of  the  Supreme  Court  of  Louisiana,  to  which  the 
present  writ  of  error  is  directed,  affirming  that  of  the  inferior  court, 
must  be  taken  as  conclusive  on  all  the  questions  mooted  in  the  record 
except  this  one.  It  must,  therefore,  be  conceded  that  plaintiff  was 
liable  to  the  tax:  that,  if  the  law  which  authorized  the  collector  to 
seize  the  property  is  valid,  his  proceedings  under  it  were  regular; 
and  that  the  judgment  of  the  court  was  sustained  by  the  facts  in  the 
case. 

474 


McMlLLEN  V.  ANDEKSON.  4.75 

Looking  at  the  Louisiana  statute  here  assailed — the  act  of  March 
14th,  1873 — we  feel  bound  to  say,  that,  if  it  is  void  on  the  ground 
assumed,  the  revenue  laws  of  nearly  all  the  States  will  he  found  void 
for  the  same  reason.  The  mode  of  assessing  taxes  in  the  States  by 
the  Federal  Government,  and  by  all  governments,  is  necessarily  sum- 
mary, that  it  may  be  speedy  and  effectual.  By  summary  is  not  meant 
arbitrary,  or  unequal,  or  illegal.  It  must,  under  our  Constitution, 
be  lawfully  done. 

But  that  does  not  mean,  nor  does  the  phrase  "due  process  of  law" 
mean,  by  a  judicial  proceeding.  The  nation  from  whom  we  inherit 
the  phrase  "due  process  of  law"  has  never  relied  upon  the  courts  of 
justice  for  the  collection  of  her  taxes,  though  she  passed  through  a 
successful  revolution  in  resistance  to  unlawful  taxation.  We  need 
not  here  go  into  the  literature  of  that  constitutional  provision,  be- 
cause in  any  view  that  can  be  taken  of  it  the  statute  under  considera- 
tion does  not  violate  it.  It  enacts  that,  when  any  person  shall  fail 
or  refuse  to  pay  his  license  tax,  the  collector  shall  give  ten  days'  writ- 
ten or  printed  notice  to  the  delinquent  requiring  its  payment;  and 
the  manner  of  giving  this  notice  is  fully  prescribed.  If  at  the  ex- 
piration of  this  time  the  license  lcbe  not  fully  paid,  the  tax-collector 
may,  without  judicial  formality,  proceed  to  seize  and  sell,  after  ten 
days'  advertisement,  the  property"  of  the  delinquent,  or  so  much 
as  may  be  necessary  to  pay  the  tax  and  costs. 

Another  statute  declares  who  is  liable  to  this  tax,  and  fixes  the 
amount  of  it.  The  statute  here  complained  of  relates  only  to  the 
manner  of  its  collection. 

Here  is  a  notice  that  the  party  is  assessed,  by  the  proper  officer, 
for  a  given  sum  as  a  tax  of  a  certain  kind,  and  ten  days'  time  given 
him  to  pay  it.  Is  not  this  a  legal  mode  of  proceeding?  It  seems 
to  be  supposed  that  it  is  essential  to  the  validity  of  this  tax  that 
the  party  charged  should  have  been  present,  or  had  an  opportunity  to 
be  present,  in  some  tribunal  when  he  was  assessed.  But  this  is  not, 
and  never  has  been,  considered  necessary  to  the  validity  of  a  tax. 
And  the  fact  that  most  of  the  States  now  have  boards  of  revisers  of 
tax  assessments  does  not  prove  that  taxes  levied  without  them  are 
void. 

Xor  is  the  person  charged  with  such  a  tax  without  legal  remedy 
by  the  laws  of  Louisiana.  It  is  probable  that  in  that  State,  as  in 
others,  if  compelled  to  pay  the  tax  by  a  levy  upon  his  property,  he 
can  sue  the  proper  party,  and  recover  back  the  money  as  paid  under 
duress,  if  the  tax  was  illegal. 

But  however  that  may  be,  it  is  quite  certain  that  he  can,  if  he  is 


476  THE  COLLECTION  OF  THE  TAX. 

wrongfully  taxed,  stay  the  proceeding  for  its  collection  by  process  of 
injunction.  See  Fonqua's  Code  of  Practice  of  Louisiana,  arts.  296-309 
inclusive.  The  act  of  1874  recognizes  this  right  to  an  injunction 
and  regulates  the  proceedings  when  issued  to  stay  the  collection  of 
taxes.  It  declares  that  they  shall  be  treated  by  the  courts  as  pre- 
ferred cases,  and  imposes  a  double  tax  upon  the  dissolution  of  the 
injunction. 

But  is  is  said  that  this  is  not  due  course  of  law,  because  the  judge 
granting  the  injunction  is  required  to  take  security  of  the  applicant, 
and  that  no  remedial  process  can  be  within  the  meaning  of  the  Con- 
stitution which  requires  such  a  bond  as  a  condition  precedent  to  its 
issue. 

It  can  hardly  be  necessary  to  answer  an  argument  which  excludes 
from  the  definition  of  due  process  of  law  all  that  numerous  class  of 
remedies  in  which,  by  the  rules  of  the  court  or  by  legislative  provi- 
sions, a  party  invoking  the  powers  of  a  court  of  justice  is  required 
to  give  that  security  which  is  necessary  to  prevent  its  process  from 
being  used  to  work  gross  injustice  to  another. 

Judgment  affirmed. 

See  also  Palmer  v.  McMahon,  133  U.  S.  660,  affirming  102  N.  Y.  176; 
and  Commonwealth  v.  Byrne,  20  Grattan  (Va.)  165,  infra.  The  legislature 
may  provide  for  distress  and  sale  of  land  for  non-payment  of  taxes.  See 
Springer  v.  United  States,  102  U.  S.  586,  supra.  Mr.  Justice  Swayne  in  his 
opinion  in  this  case  says:  "Why  is  it  not  competent  for  congress  to  apply 
to  realty  as  well  as  personalty  the  power  to  distrain  and  sell  when  necessary 
to  enforce  the  payment  of  a  tax?  It  is  only  the  further  legitimate  exercise 
of  the  same  power  for  the  same  purpose The  prompt  pay- 
ment of  taxes  is  always  important  to  the  public  welfare.  It  may  be  vital 
to  the  existence  of  a  government.  The  idea  that  every  tax-payer  is  entitled 
to  the  delays  of  litigation  is  unreason.  If  the  laws  here  in  question  involved 
any  wrong  or  unnecessary  harshness,  it  was  for  congress,  or  the  people 
who  make  congresses,  to  see  that  the  evil  was  corrected.  The  remedy  does 
not  lie  with  the  judicial  branch  of  the  government." 


DONALD  V.  McKTNNON.  477 

DONALD  V.  McKINNON. 

Supreme  Court  of  Florida.    June,  1880. 
17  Florida  746. 

Mr.  Justice  WESTCOTT  delivered  the  opinion  of  the  court. 

The  plaintiff  claims  title  through  two  sources,  a  deed  after  sale  of 
land  for  taxes,  and  a  deed  after  sale  under  a  judgment  rendered  by 
a  justice  of  the  peace. 

As  to  the  tax  deed.  During  the  trial  defendant  proved  by  L.  M. 
Gamble,  that  he  was  collector  of  revenue  for  the  year  1876,  that  he 
liad  the  assessment  book  for  that  year  and  turned  it  over  to  his  suc- 
cessor in  1877.  "This  book"  was  then  offered  to  show  that  there  was 
no  warrant  to  it  to  the  collector.  Upon  objection  by  the  plaintiff, 
the  book  was  ruled  out  by  the  court,  and  to  this  action  there  was 
an  exception 

When,  however,  the  then  (that  is  in  1876)  tax  collector  of  revenue, 
L.  M.  Gamble,  was  offered  as  a  witness  to  prove  that  there  was  no 
\varrant  to  the  assessment  roll  of  1876,  under  which  this  tax  sale  wa3 
had,  we  cannot  see  that  this  evidence  was  properly  rejected.  The 
law  required  that  to  the  assessment  roll  delivered  to  the  collector  of 
revenue,  a  warrant  under  the  hand  of  the  assessor  should  be  annexed 
in  the  following  form  to-wit:  giving  the  form,  &c. 

Without  this  warrant  "delivered  by  the  officer  of  the  law,  designated 
for  that  purpose,  the  collector  has  no  authority  to  proceed  to  enforce 
the  payment  of  taxes."  This  being  omitted,  the  performance  of  all  the 
other  acts,  such  as  due  advertisement,  will  lay  no  foundation  for  the 
sale  of  the  land  (5  Ired.,  131;  7  New  York,  517;  14  New  Hamp.,  84; 
Hilliard  on  Taxation,  396;  Cooley  on  Taxation,  292;  Blackwell  on 
Taxation,  167).  The  warrant  in  this  proceeding  fills  the  place  and 
performs  the  functions  of  a  summons.  It  is  the  writ  to  the  officer  by 
which  he  is  authorized  for  public  purposes  to  collect  the  tax,  or  in 
the  event  of  its  non-payment  to  subject  the  property  to  sale.  For 
this  reason  we  think  that  the  court  erred  in  rejecting  the  proposed 
testimony  of  Gamble,  the  person  who  at  the  time  of  the  sale  was 
the  collector  of  revenue,  and  who  proposed  to  produce  the  assessment 
roll. 

The  judgment  is  reversed  and  a  new  trial  awarded. 

In  some  states  no  such  warrant  is  required  but  authority  to  collect  the 
tax  is  given  by  statute  on  the  making  out  and  delivery  of  the  tax  list.  Tall- 
man  v.  Cooke,  43  Iowa  330.  In  case  a  warrant  is  required,  a  new  warrant 
may  be  issued  where  the  first  one  is  void  for  irregularity.  Eddy  v.  Wilson, 
43  Vt.  362. 


478  THE  COLLECTION  OF  THE  TAX. 


DANIELS  V.  NELSON. 

Supreme  Court  of  Vermont.     August,  1868. 
J,l   Vermont,  161. 

Replevin  for  one  bay  mare.  Plea,  the  general  issue,  and  notice  of 
justification  by  the  defendant,  under  a  rate-bill  and  warrant,  as  col- 
lector of  school  district  No.  6  in  Woodbury,  and  the  taking  the  prop- 
erty as  the  property  of  Luke  Daniels,  on  tax  against  him.  Trial  by 
the  court,  March  term,  1868,  Peck,  J.,  presiding.  Judgment  for 
the  defendant  for  damages  and  costs  and  for  return  of  the  property. 

BARRETT,  J.  In  this  case  the  property  in  question,  a  mare,  was  dis- 
trained upon  a  tax-warrant  in  satisfaction  of  a  poll-tax  against  the 
plaintiff's  father,  there  being  no  tax  against  him  on  account  of  said 
mare  or  any  other  property.  The  court  found  the  legal  title  of  the 
property  to  be  in  the  plaintiff,  as  between  him  and  his  father,  by  a 
contract  made  in  good  faith,  and  not  fraudulent  in  fact.  But  the 
court  further  found  and  held  that  the  ostensible  ownership  and  pos- 
session were  so  far  in  the  father  as  to  render  the  mare  subject  to  levy 
for  the  tax,  even  if  she  would  not  have  been  if  the  plaintiff  had  taken 
and  kept  the  exclusive  possession  and  claim  of  title  in  himself.  The 
question  is  thus  directly  presented,  whether  the  doctrine  of  fraud 
in  law  is  applicable,  so  as  to  subject  the  mare  to  the  levy  made  in 
this  case. 

The  several  English  statutes,  the  substance  and  spirit  of  which  are 
embraced  in  our  own,  on  the  subject  of  fraudulent  conveyances,  arc- 
designed  to  protect  creditors  and  bona  fide  purchasers,  and  the  fraud, 
which  gives  occasion  for  those  statutes,  looks  exclusively  to  such  credi- 
tors and  purchasers;  and,  moreover,  they  contemplate  actual  fraud 
both  in  intent  and  act.  The  doctrine  persistently  adhered  to  in  Ver- 
mont, of  fraud  in  law,  does  not  give  any  additional  scope  either  to 
the  statutory  or  common  law  operation  of  fraud.  That  doctrine 
works  in  subordination  to  such  law,  and  adopts  a  particular  mode  of 
determining  the  existence  of  the  vitiating  fraud  in  the  given  case. 
In  a  sense,  it  propounds  a  kind  of  rule  of  evidence,  prescribing  what 
facts  proved  shall  be  held  to  show  the  existence  of  such  fraud.  It 
says  to  the  party,  prove  that  there  was  no  visible  change  of  substantial, 
exclusive  possession  from  the  vendor  to  the  vendee,  and  the  fraud 
required  by  the  law  to  invalidate  the  sale  as  against  the  creditor? 
and  bona  fide  purchasers,  will  be  established. 

In  many  states,  anrl  nt  porno  periods  in  England,  the  lack  of  such 


. 

DANIELS  V.  NELSON.  47S 

change  of  possession  has  not  been  allowed  such  conclusive  effect,  but 
has  constituted  matter  of  circumstantial  evidence  bearing  on  the  ques- 
tion of  actual  fraud.  The  conclusive  effect  of  that  fact  in  this,  and 
some  other  of  the  States,  has  been  allowed  and  adopted  as  matter, 
and  on  the  ground,  of  policy. 

Now  it  is  obvious  that  the  policy  and  final  cause  of  the  rule  can 
not  be  predicated  of  the  case  in  hand.  The  party  to  which  the  tax 
is  owing,  is  not  a  creditor.  The  state,  the  town,  the  school  district, 
do  not  give  credit  by  way  of  trust  and  confidence.  They  make  an 
authoritative  and  arbitrary  exaction,  and  are  armed  with  all  the  power 
of  the  government  for  its  enforcement  out  of  any  and  all  of  the  prop- 
erty of  the  party  taxed  including  the  enticement  of  the  prison  walls, 
in  want  of  the  property  whereof  to  get  satisfaction.  In  Johnson  v. 
Howard  and  Trustee  (41  Vermont  122),  it  was  held  that  town  taxes 
could  not  be  deducted  in  diminution  of  the  liability  of  the  town  as 
trustee  of  the  defendant,  under  section  52  of  chapter  34  of  the  Gen- 
eral Statutes. 

In  the  present  case,  as  before  remarked,  the  tax  was  not  on  account 
of  any  property.  It  was  only  a  poll-i&x.  that  fact  indicating  that, 
likely  enough,  not  property,  but  only  the  person  of  the  party  taxed, 
might  be  reached  by  warrant  for  its  compulsory  collection. 

As  the  present  case  does  not  fall  within  the  reason  of  the  rule, 
and  as  no  precedent  is  shown  for  applying  the  rule  to  such  a  case, 
we  see  no  legal  ground  or  reason  for  subjecting  the  plaintiff's  prop- 
erty to  the  compulsory  payment  of  his  father's  poll-tax.  No  party 
in  interest  has  been  misled.  No  party  in  interest  could'  be  misled 
in  such  a  case,  by  such  possession  and  use  of  the  property  by  the 
plaintiff's  father  as  were  shown  in  this  case. 

The  fact  that  the  defendant  levied  on  it  because  of  such  possession 
and  use,  is  no  element  in  the  law  of  the  subject.  It  was  an  experi- 
ment on  his  part  to  get  the  tax  satisfied.  What  gives  potency  to  the 
lack  of  change  of  possession,  is  its  tendency  to  induce  false  credit  in 
the  creation  of  claims  against  the  former  owner,  who  still  continues 
in  possession,  not  that  it  may  induce  a  party  to  levy  final  process 
upon  it  in  satisfaction  of  his  claim.  The  case  in  this  respect  bears  a 
close  analogy  to  one  feature  of  Turner  v.  Waldo,  40  Vt.  51. 

The  judgment  is  reversed,  and  judgment  for  the  plaintiff  for  nomi- 
nal damages  and  his  costs. 


480        THE  COLLECTION  OF  THE  TAX. 


SHELDON  V.  VAN  BUSKIRK. 

Court  of  Appeals  of  New  York.    October,  1849. 
2  New  York,  473. 

John  Sheldon  sued  Lawrence  Van  Buskirk  in  a  justice's  court  of 
the  county  of  Cortland,  in  trespass  for  entering  his  close  and  taking 
and  selling  a  number  of  sheep.  The  defendant  was  collector  of  the 
town  of  Preble,  in  that  county,  and  justified  under  a  warrant  held  bv 
him  for  the  collection  of  a  tax  against  Thomas  Sheldon,  who  was 
the  plaintiff's  son  and  resided  on  the  same  farm  with  him. 

The  jury  found  a  verdict  for  the  defendant  on  which  the  justice 
rendered  judgment.  The  county  court  of  Cortland  county,  on  cer- 
tiorari,  reversed  the  judgment  of  the  justice,  and  the  supreme  court 
sitting  in  the  sixth  district,  on  error  brought,  reversed  the  judgment 
of  the  common  pleas,  and  affirmed  that  of  the  justice.  John  Shel- 
don then  brought  error  to  this  court. 

RUGGLES,  J.  Van  Buskirk,  the  collector,  who  was  the  defendant  in 
the  justice's  court,  was  bound  to  prove  on  the  trial,  for  the  purpose 
of  justifying  himself  in  levying  on  and  selling  the  property  in  ques- 
tion, that  he  acted  under  a  lawful  warrant  issued  by  persons  clothed 

with  competent  authority  for  that  purpose The 

warrant  was  in  point  of  form  substantially  in  pursuance  of  the 
statute,  and  was  made  by  persons  actually  having  lawful  authority  to 
make  and  issue  it. 

Another  point  made  by  the  plaintiff  is,  that  the  collector  should 
have  produced  not  only  the  warrant  but  the  adjudication,  or  pro- 
ceedings of  the  supervisors  in  the  nature  of  an  adjudication,  by  which 
the  tax  was  laid,  the  collector  having  sold  the  goods  of  John  Sheldon 

to  satisfy  the  tax  against  Thomas  Sheldon Ever 

since  the  case  of  Savacool  v.  Bougliton,  5  Wend.  170,  a  ministerial 
officer  is  protected  in  the  execution  of  process  regular  on  its  face, 
and  coming  from  a  court  or  body  of  men  having  jurisdiction  of  the 
subject  matter.  Where  an  officer  who  has  seized  property  by  virtue 
of  an  execution,  is  sued  by  the  defendant  in  the  execution  for  taking 
the  property,  the  officer  is  never  compelled  to  produce  the  judgment 
to  justify  the  taking.  The  execution  alone  protects  him.  But  if  the 
officer  is  sued  by  A.  for  taking  his  property  under  color  of  an  execu- 
tion against  B.,  the  question  to  be  tried  is  whether  the  property  when 
taken  belonged  to  A.  or  to  B,  Tf  it  belonged  to  A.,  the  execution, 


BRACKETT  .V.  VISING.  481 

with  or  without  the  judgment,  is  no  protection,  for  it  does  not  com- 
mand the  officer  to  take  A.'s  property.  But  if  A.  claims  title  to  the 
property  by  virtue  of  a  sale  from  B.  to  him,  which  is  alleged  to  be 
fraudulent  against  B.'s  judgment  creditors,  then  it  becomes  necessary 
for  the  officer  to  produce  the  judgment  on  which  the  execution  issued 
against  B. ;  but  this  is  for  the  purpose  of  proving,  in  connection  with 
other  testimony,  that  the  pretended  sale  from  B.  to  A.  was  fraudu- 
lent and  void,  and  that  the  property  therefore  still  belongs  to  B.  and 
not  to  A.  The  judgment  in  such  case  is  given  in  evidence,  because  it 
affects  the  title  to  the  property  in  question,  and  not  because  it  is  for 
any  other  purpose  necessary  to  protect  the  officer. 

In  the  present  case  nothing  is  necessary  for  the  protection  of  the 
officer  except  the  warrant.  John  Sheldon  does  not  claim  title  to  the 
property  in  question  from  Thomas;  and  if  he  did  it  would  make  no 
difference.  The  collector  is  authorized  by  the  statute  (1  R.  S.  387, 
§  2,)  to  sell  not  only  the  goods  and  chattels  of  the  party  taxed,  "but 
any  goods  and  chattels  in  his  possession,  and  no  claim  of  property 
made  by  any  other  person  shall  be  available  to  prevent  a  sale."  The 
jury  found  by  their  verdict  that  the  property  sold  by  the  collector 
either  belonged  to  or  was  in  the  possession  of  Thomas  Sheldon.  The 
defendant  therefore  had  the  right  to  sell. 

The  judgment  of  the  supreme  court  must  therefore  be  affirmed, 
with  the  costs  of  the  appeal,  to  be  paid  by  the  appellant. 

Judgment  affirmed. 


BRACKETT  V.  VINING. 

Supreme  Judicial  Court  of  Maine.    1860. 
49  Maine  356. 

Trespass.  From  the  report  of  the  evidence,  offered  at  the  trial,  it 
appears  that  the  plaintiff  was  collector  of  a  school  district  tax,  and,  by 
virtue  of  his  warrant,  seized  a  horse  as  the  property  of  one  Lord,  who 
refused  to  pay  his  assessed  proportion  of  the  tax.  The  property  was 
taken  by  the  plaintiff  on  the  27th  day  of  October,  1859;  and  on  the 
day  following,  he  gave  public  notice  for  its  sale  on  the  third  day  of 
November, — on  which  day,  and  before  the  hour  appointed  for  the  sale, 
the  defendant,  as  a  deputy  sheriff,  having  a  writ  of  replevin  in  favor 
of  said!  Lord,  took  the  horse  from  the  plaintiff's  possession;  where- 
upon, this  action  was  commenced. 
31 


482  THE  COLLECTION  Of  THE  TAX. 

At  Nisi  Prius,  APPLETON,  J.,  presiding,  questions  were  raised  by 
the  counsel  of  the  defendant,  involving  the  legality  of  the  tax,  and 
of  the  proceedings  of  the  plaintiff  under  his  warrant.  For  the  pur- 
pose of  presenting  the  questions  to  the  full  Court,  the  presiding  judge 
overruled  the  objections,  and  a  verdict  was  rendered  for  the  plain- 
tiff. The  defendant  excepted. 

At  the  argument  on  the  exceptions,  the  counsel  of  the  defendant,  D. 
D.  Stewart,  submitted  the  case  upon  the  point,  that,  by  the  terms  of 
the  warrant  and  by  the  statute,  the  property  should  have  been  sold  at 
the  expiration  of  fouc  days  after  its  seizure.  After  that  time,  the 
plaintiff  could  not  legally  sell.  The  keeping  of  the  horse  seven  days, 
at  least  before  the  day  of  sale,  was  an  unauthorized  act,  and  the  plain- 
tiff thereby  became  a  trespasser  ab  initio. 

GOODENOW,  J. — The  plaintiff  did  not  comply  with  the  directions 
of  the  warrant,  by  virtue  of  which  he  took  the  property  in  contro- 
versy, nor  with  the  requirements  of  the  statute  relating  to  the  sale 
of  the  property  so  taken.  The  warrant,  therefore,  is  insufficient  to 
protect  him.  He  kept  the  property  too  long — beyond  the  expiration 
of  the  time,  when  it  should  have  been  sold — and,  by  so  doing,  must  be 
regarded  as  a  trespasser  ab  initio.  It  is  unnecessary  to  consider  the 
alleged  illegality  of  the  proceedings  in  the  assessment  of  the  tax. 
The  exceptions  must  be  sustained,  verdict  set  aside,  and  a  new  trial 
granted. 

TENNEY,  C.  J.,  KICE,  CUTTING,  MAY  and  DAVIS,  JJ.,  concurred. 


II.    LIENS  AND  FORFEITURES. 
CONE  V.  WILSON  AND  ANOTHER. 

Supreme  Court  of  Indiana.    May,  1860. 
14  Indiana 


PERKINS,  J.  James  Goodnow,  on  the  first  day  of  January,  1858, 
was  a  resident  of  Decatur  county,  Indiana,  and  the  owner  of  real 
estate  to  the  value  of  10,000  dollars,  and  of  personal  of  the  value  of 
2,000  dollars.  On  the  aggregate  amount  of  this  property,  there  wab 
assessed,  for  the  year  above  named,  a  tax  of  90  dollars. 

On  the  19th  day  of  November,  1858,  Goodnow  assigned  all  of  said 
property  to  Forsyth  and  Wilson,  in  trust  for  the  payment  of  specified 
debts. 


CONE  V.   WILSON   AND  ANOTHER.  483 

On  the  loth  day  of  January,  1859,  Goodnow  removed  from  Deca- 
tur  county.  Prior  to  May,  1859,  all  of  said  real  estate  had  been  con- 
veyed to  purchasers.  In  that  month,  the  treasurer  of  Decatur  county 
seized,  for  the  payment  of  said  tax  against  Goodnow  one  hundred 
cords  of  wood,  a  part  of  the  property  of  said  Goodnow  assigned  to 
said  trustees  as  aforesaid,  and  which  had  not  been  removed  from  off 
the  premises  on  which  it  was  when  the  assignment  was  made;  and 
the  question  is,  was  that  wood  liable  to  the  seizure? 

The  personal  property  of  a  tax-payer  is  the  primary  fund  out  of 
which  all  the  taxes  assessed  against  him  upon  poll,  personal,  and  real 
estate,  are  to  be  collected,  so  long  as  it  may  be  found  within  the 
county.  1  R.  S.  p.  130,  §§  96,  101. 

The  aggregate  amount  of  these  taxes  is  a  lien  upon  all  the  real 
estate  of  the  tax-payer  within  the  county,  and  no  part  of  such  real 
estate  is  discharged  from  the  lien  till  the  entire  amount  of  tax  is 
paid:  though  the  application  of  a  part  payment  to  a  particular  piece 
or  portion  of  such  real  estate,  will  relieve  such  piece  or  portion  from 
liability  to  sale  till  the  remaining  portions  are  exhausted  by  sale. 
1  R.  S.  p.  132,  §§  111,  112,  114. 

The  lien  upon  the  real  estate  attaches  on  the  first  of  January, 
annually,  Id.  §  112  (1). 

Section  113,  on  the  same  page  of  the  volume  cited,  reads  as  follows: 

"All  the  property,  both  real  and  personal,  situate  in  any  county, 
shall  be  liable  to  the  payment  of  all  taxes,  penalties,  interest,  and 
costs  charged  to  the  owner  thereof,  in  such  county;  and  no  partial 
payment  of  any  such  taxes,  penalties,  interest,  or  costs,  shall  dis- 
charge or  release  any  part  or  portion  of  such  property,  until  the 
whole  be  paid;  which  lien  shall  in  no  wise  be  affected  or  destroyed 
by  any  sale  or  transfer  of  any  such  personal  property." 

This  section  plainly  implied  a  lien  upon  personal  property  for  all 
taxes;  but  it  does  not  fix  the  time  when  it  shall  commence.  As  be- 
tween the  state  and  the  owner  at  the  time  of  the  assessment,  it  un- 
doubtedly commences  as  soon  as  the  duplicate  is  issued  to  the  treas- 
urer. See  1  R.  S.  pp.  129,  131. 

An  execution  is  a  lien  upon  the  defendant's  property,  as  against 
all  persons,  from  its  delivery  to  the  officer.  2  R.  S.  p.  131.  Yet  the 
officer  holding  it,  should  first  call  upon  the  defendant  for  payment 
before  he  levies  upon  property.  Perk.  Pr.,  p.  380. 

The  treasurer  must  do  so,  as  to  taxes,  before  he  levies  or  seizes 
property  by  virtue  of  the  duplicate.  1  R.  S.  pp.  129,  130. 

And  we  do  not  think  the  mere  assignment  of  property  to  trustees 
for  the  payment  of  debts  constitutes  such  a  transfer  of  it  as  will  divest 


484  THE  COLLECTION  OF  THE  TAX. 

the  lien  of  the  state  upon  the  property  against  the  tax-payer,  however 
it  might  be  in  case  of  a  transfer  to  an  absolute  purchaser,  in  good 
faith,  for  a  valuable  consideration. 

Again,  it  does  not  appear  that  the  possession  of  the  wood  seized 
in  this  case,  had  ever  been  delivered  to  the  assignees,  nor  that  the  deed 
of  assignment  had  been  recorded. 

We  leave  the  general  question  as  to  the  lien  of  taxes  upon  per- 
sonal property  under  any  and  all  circumstances,  undecided. 

Per  Curiam. — The  judgment  is  reversed  with  costs.  Cause  re- 
manded, &c. 


HENDERSON'S   DISTILLED   SPIRITS. 

Supreme  Court  of  the  United  States.     December,  1871. 
14  Wallace  44- 

Mr.  Justice  CLIFFORD  delivered  the  opinion  of  the  court. 

Distilled  spirits,  upon  which  no  tax  had  been  paid  according  to 
law,  were,  by  the  thirty-second  section  of  the  act  of  the  thirteenth  of 
July,  1866,  subject  to  a  tax  of  two  dollars  on  each  and  every  proof 
gallon,  to  be  paid  by  the  distiller,  owner,  or  any  person  having  pos- 
session thereof,  and  the  same  section  provided  that  the  tax  shall  be 
a  lien  on  the  spirits  distilled,  and  on  the  distillery  used  for  distilling 
the  same,  with  the  stills,  vessels,  fixtures,  and  tools  therein,  &c.  (14 
Stat.  at  Large  157).  Express  provision  is  also  made  by  the  four- 
teenth section  of  that  act,  that  all  goods  or  commodities,  for  or  in 
respect  whereof  any  tax  is  or  shall  be  imposed,  or  any  materials, 
utensils,  or  vessels  proper  or  intended  to  be  made  use  of  for  or  in 
the  making  of  such  goods  or  commodities,  in  case  they  shall  be  re- 
moved or  shall  be  deposited  or  concealed  in  any  place  with  intent  to 
defraud  the  United  States  of  such  tax,  or  any  part  thereof,  shall  be 
forfeited.  (Ib.  151) 

Regular  seizure  of  the  one  hundred  barrels  of  distilled  spirits  in 
question  was  made  on  the  first  day  of  September,  1868,  by  the  col- 
lector of  the  district,  as  alleged  in  the  information,  and  the  record 
shows  that  the  information  was  duly  filed  by  the  district  attorney 
on  the  seventh  of  the  same  month  in  the  District  Court  of  the  United 
States  for  the  district  where  the  seizure  was  made.  Being  a  seizure 
on  land,  the  claimant  was  entitled  to  a  trial  by  jury,  but  he  ap- 
peared and  the  parties  entered  into  a  stipulation  waiving  a  jury  and 
submitted  the  case  to  the  court  upon  an  agreed  statement  of  facts,  as 


HENDERSON'S  DISTILLED  SPIRITS.  485 

they  had  a  right  to  do,  even  before  any  legislative  provision  was  en- 
acted for  waiving  a  jury  by  a  written  stipulation 

Pursuant  to  that  stipulation  the  parties  were  heard,  and  the  District 
Court  dismissed  the  information  and  rendered  judgment  for  the  re- 
spondent. Exceptions  were  duly  taken  by  the  district  attorney  and 
he  sued  out  a  writ  of  error  and  removed  the  cause  into  the  Circuit 
Court,  where  the  judgment  rendered  by  the  District  Court  was 
affirmed,  and  the  United  States  thereupon  sued  out  a  writ  of  error  to 
the  Circuit  Court  and  removed  the  cause  into  this  court  for  re-exami- 
nation. 

Six  articles,  each  charging  a  forfeiture    of    the 

spirits  in  question,  are  contained  in  the  information,  but  in  the  view 
of  the  case  taken  by  the  court  it  will  only  be  necessary  to  examine 
the  fourth  in  the  series 

Four  material  ingredients  are  involved  in  the  charge  contained  in 
the  fourth  article  of  the  information:  (1)  That  the  spirits  were 
manufactured  at  some  place  within  the  United  States,  between  the 
day  therein  named  and  the  date  of  the  seizure.  (2)  That  the  spirits 
were  then  and  there  goods  and  commodities  on  which  a  tax  was  im- 
posed by  some  provision  of  law  then  in  force.  (3)  That  the  spirits 
were  removed  from  the  place  where  distilled  with  intent  to  defraud 
the  United  States  of  such  tax.  (4)  That  the  tax  was  unpaid  at 
the  time  the  spirits  were  so  removed,  with  such  fraudulent  intent. 

Beyond  all  doubt  the  admission  that  the  fourth  article  is  true  i«  a 
conclusive  admission  that  each  and  every  one  of  the  well-pleaded  alle- 
gations which  it  contains  are  also  true,  which,  standing  alone,  would 
certainly  be  a  concession  on  the  record  that  the  property  is  subject 
to  forfeiture,  unless  it  can  be  shown  that  the  fourth  article  in  the 
information  is  insufficient  in  law  to  warrant  a  judgment  in  favor  of 
the  United  States. 

Viewed  in  that  light,  as  the  admission  must  be,  the  next  question  is 
whether  the  statement  appended  to  the  admission  is  sufficient  to  save 
the  property  from  condemnation  in  the  possession  of  the  defendant. 
Properly  analyzed  the  statement  appended  to  the  admission  contains 
two  averments  in  avoidance  of  the  consequences  which  would  other- 
wise follow  from  the  admitted  acts  of  the  antecedent  owner:  (1.) 
That  the  defendant  paid  the  tax  subsequent  to  the  removal  of  the 
spirits  from  the  distillery  and  before  they  were  removed  from  the 
bonded  ware-house  and  before  the  seizure  by  the  collector.  (2.)  That 
he  was  a  bona  fide  and  innocent  purchaser,  withoiit  notice  that  the 
spirits  were  forfeited  a?  alleged  in  that  article  of  the  information. 


486  THE  COLLECTION  OF  THE  TAX. 

Where  the  forfeiture  is  made  absolute  by  statute  the  decree  of  con- 
demnation when  entered  relates  back  to  the  time  of  the  commission  of 
the  wrongful  acts,  and  takes  date  from  the  wrongful  acts  and  not  from 
the  date  of  the  sentence  or  decree.  (Koberts  v.  Witherall,  1  Salkeld 
223 ;  Eobert  v.  Witherhead,  12  Modern,  92 ;  United  States  v.  Bags  of 
Coffee,  8  Cranch  398;  The  Brigantine  Mars,  Ib.  417;  Gelston  v. 
Hoyt,  3  Wheaton,  311;  Caldwell  v.  United  States,  8  Howard  381; 
United  States  v.  Grundy,  3  Cranch  338;  Wood  v.  United  States,  16 
Peters,  342;  Clifton  v.  United  States,  4  Howard,  248).  Subsequent 
payment  of  the  duties,  therefore,  is  no  defence  to  an  information  for 
a  forfeiture  founded  upon  antecedent  wrongful  acts,  as  the  effect  of 
such  wrongful  acts,  where  the  forfeiture  is  made  absolute  by  statute, 
is  to  divest  the  owner  of  all  property  in  the  goods  seized  and  to  vest 
the  title  to  the  same  in  the  United  States,  in  case  a  prosecution  en- 
sues, and  a  decree  of  condemnation  follows,  as  the  decree  of  con- 
demnation when  entered  by  a  court  of  competent  jurisdiction  relates 
back  to  the  date  of  the  wrongful  acts  as  alleged  and  proved  at  the 
trial  or  in  the  hearing  of  the  cause.  (Fountain  v.  Ins.  Co.,  11  John- 
son, 293;  Kennedy  v.  Strong,  14  Id.  128).  Repeated  decisions  of 
this  court  have  established  that  rule  in  all  cases  where  the  forfeiture 
is  made  absolute  by  the  act  of  Congress,  and  it  necessarily  follows 
that  neither  the  subsequent  payment  of  the  duties  nor  the  fact  that 
the  defendant  is  an  innocent  purchaser,  without  notice  of  the  wrong- 
ful acts  of  the  antecedent  owner,  constitutes  any  defence  to  the  charge 
contained  in  the  fourth  article  of  the  information.  (Wilkins  v.  Des- 
pard,  5  Term,  112.)  Many  such  adjudged  cases  are  to  be  found 
in  the  reported  decisions  of  this  court,  and  it  must  be  admitted  that 
they  establish  the  rule  beyond  all  doubt,  that  the  forfeiture  becomes 
absolute  at  the  commission  of  the  prohibited  acts,  and  that  the  title 
from  that  moment  vests  in  the  United  States  in  all  cases  where  the 
statute  in  terms  denounces  the  forfeiture  of  the  property  as  a  penalty 
for  a  violation  of  law,  without  giving  any  alternative  remedy,  or  pre- 
scribing any  substitute  for  the  forfeiture,  or  allowing  any  exceptions 
to  its  enforcement,  or  employing  in  the  enactment  any  language  show- 
ing a  different  intent;  and  that  in  all  such  cases  it  is  not  in  the  power 
of  the  offender  or  former  owner  to  defeat  the  forfeiture  by  any  sub- 
sequent transfer  of  the  property  even  to  a  lona  fide  purchaser  for 
value  without  notice  of  the  wrongful  acts  done  and  committed  by  the 
former  owner.  Established  as  that  rule  has  been  by  the  decisions  of 
this  court  for  more  than  half  a  century,  it  is  insisted  that  it  should  be 
applied  in  the  case  before  the  court,  and  it  is  difficult  to  see  any 
reason  for  rejecting  the  proposition,  as  the  words  of  the  act  under 


HENDERSON'S  DISTILLED  SPIRITS.  487 

which  the  fourth  article  of  the  information  is  drawn  denounce  the 
forfeiture  of  the  property  in  terms  as  absolute  and  unqualified  as  any 
which  can  be  chosen  in  our  language  (United  States  v.  Bags  of  Coffee, 
8  Cranch  398;  United  States  v.  Grundy,  3  Id.  338) 

Concede  all  that  and  it  is  clear  that  the  United  States  are  entitled 
to  judgment,  if  it  be  true  that  the  forfeiture  relates  back  to  the  date 

of  the  wrongful  acts  charged  in  the  information 

Nothing  can  be  more  certain  in  legal  investigation  than  that  the 
decree  must  have  been  for  the  United  States  if  the  claimant  had  de- 
murred to  the  fourth  article  of  the  information,  unless  it  can  be  held 
that  the  act  of  Congress  denouncing  the  forfeiture  is  unconstitutional, 
as  the  article  in  question  embodies  the  exact  language  of  that  provi- 
sion, and  it  is  equally  certain  that  a  motion  in  arrest  of  judgment 
would  also  have  been  unavailing  for  the  same  reason,  and  also  be- 
cause the  validity  of  the  act  of  Congress  is  beyond  all  doubt. 

Congress  possesses  the  power  to  levy  taxes,  duties,  imposts,  and  ex- 
cises, and  it  is  as  clear  that  Congress  may  enact  penalties  and 
forfeitures  for  the  violation  of  such  laws  as  it  is  that  Congress  may 
levy  the  taxes  or  duties  or  pass  laws  for  their  collection,  safe-keeping, 
and  disbursement. 

Tested  by  the  charge,  as  made  in  that  article,  and  the  admission  ap- 
plicable to  it,  as  exhibited  in  the  agreed  statement,  as  the  question 
must  be,  and  it  is  clear  that  the  spirits  may  have  been  removed  else- 
where than  to  a  bonded  warehouse  before  they  were  placed  in  that 
depository  by  the  owner  and  distiller.  Such  certainly  would  be  the 
legal  conclusion  if  the  defendant  had  demurred  to  the  information, 
and  the  court  is  of  the  opinion  that  the  same  conclusion  must  follow 
from  the  admission  that  the  fourth  article  of  the  information  is  true, 
as  the  admission  is  expressed  in  the  agreed  statement. 

Henderson,  the  claimant,  purchased  the  spirits  while  they  were  in 
the  bonded  warehouse  and  after  they  had  been  deposited  therein  by 
the  owner  of  the  distillery  where  the  spirits  were  manufactured,  and 
having  made  the  purchase  without  notice  that  any  fraud  had  been 
practiced  by  the  distiller,  and  having  paid  the  tax  before  the  spirits 
were  removed  from  the  bonded  warehouse,  it  is  insisted  by  his  coun- 
sel, in  every  possible  form  of  argument,  that  his  title  is  perfect  and 
that  the  spirits  are  not  liable  to  forfeiture,  but  the  decisive  answer  to 
all  that  is  the  one  already  given,  that  the  forfeiture  relates  back  to 
the  unlawful  or  wrongful  acts  of  the  antecedent  owner,  and  that  lie 
cannot  by  any  subsequent  transfer  of  the  property  defeat  the  title 
of  the  United  States,  as  settled  by  a  series  of  decisions  which,  if 


488  THE  COLLECTION  OF  THE  TAX. 

traced  to  their  source,  have  their  origin  in  the  early  history  of  the 
common  law.  (4  Bacon's  -Abridgment,  346;  Plowden,  488,  b.  Co. 
Litt.  25;  1  Chitty's  Criminal  Law,  727.) 

Eules  of  decision  of  such  long  standing  and  so  necessary  to  pro- 
tect the  public  revenue  cannot  be  changed,  nor  can  it  be  admitted 
that  the  charge  contained  in  the  fourth  article  of  the  information 
may  not  be  sustained,  even  if  it  appears  that  the  only  removal  of 
the  spirits  made  by  the  distiller  was  to  the  bonded  warehouse,  as 
assumed  in  argument  by  counsel  for  the  defendant.  (Clarke  v.  In- 
surance Co.,  1  Story,  109). 

Unquestionably  a  removal  of  distilled  spirits  from  the  place  where 
distilled  to  such  a  depository,  if  made  to  secure  the  payment  of  the 
tax,  is  lawful,  but  it  is  equally  clear  that  if  it  is  made  with  intent 
to  defraud  the  United  States  of  the  tax  it  is  an  unlawful  act,  and 
subjects  the  spirits  to  forfeiture. 

Grant  that  the  removal  was  rightful,  as  assumed  by  the  circuit 
judge,  and  the  consideration  which  he  adopted  would  follow,  but 
it  cannot  be  assumed  in  this  case  that  the  removal  was  rightful,  as 
the  charge  in  the  fourth  article  of  the  information  is  that  it  was 
made  with  intent  to  defraud  the  United  States  of  the  tax,  and  the 
admission  in  the  agreed  statement  is  that  the  fourth  article  of  the 
information  is  true,  which  shows  as  fully  as  it  can  be  shown  that 
the  United  States  are  entitled  to  a  decree  of  condemnation,  unless 
it  can  be  established  that  the  fraudulent  intent  there  charged  could 
not  under  any  circumstances  be  carried  into  effect  by  such  a  removal 
as  that  alleged  in  the  fourth  article  of  the  information  and  ad- 
mitted in  the  agreed  statement. 

Cases  have  arisen,  as  the  records  of  this  court  show,  where  the  re- 
moval to  the  bonded  warehouse  was  made  as  a  part  of  a  preconcerted 
arrangement  with  other  parties  to  avoid  the  payment  of  the  tax,  and 
it  would  not  be  difficult  to  suppose  other  cases  where  the  removal  of 
the  spirits  from  the  place  where  distilled  to  the  bonded  warehouse 
would  be  a  necessary  part  of  a  well-devised  scheme  to  defraud  the 
United  States  by  delivering  the  spirits  to  purchasers  without  the  pay- 
ment of  the  duties.  (Distilled  Spirits,  11  Wallace,  364). 

•          •••••••»• 

Spirits  placed  in  such  a  depository  sell  more  readily  than  before 
they  were  removed,  because  they  are  regarded  as  less  likely  to  be 
subject  to  forfeiture  than  while  they  remained  in  the  distillery,  but 
it  is  clear  that  the  theory  that  an  intent  to  defraud  the  United  States 
cannot  be  predicated  of  a  removal  of  spirits  from  the  place  where 


ALBANY  SKEWING  CO.  V.  MERIDEN.  489 

distilled  to  a  bonded  warehouse  is  an  erroneous  theory,  as  it  is  mani- 
fest that  the  dishonest  distiller,  if  he  can  obtain  the  assistance  of  the 
inspector,  storekeeper,  or  collector,  as  a  partner  or  agent,  will  find 
such  removal  an  essential  step  in  almost  every  scheme  which  he  may 
devise  to  accomplish  his  wicked  designs. 

Viewed  in  any  light,  therefore,  the  court  is  of  opinion  that  the 
judgment  of  the  Circuit  Court  is  erroneous. 

Questions  are  also  presented  in  the  record  under  the  fifth  and 
sixth  articles  of  the  information,  but  the  court  having  come  to  the 
conclusion  that  the  United  States  are  entitled  to  judgment  upon  the 
fourth  article  of  the  information,  do  not  deem  it  necessary  to  ex- 
pres=  any  opinion  as  to  the  other  questions. 

Judgment  reversed  and  the  cause  remanded  with  instructions  to 
render  Judgment  for  the  United  States. 

Mr.  Justice  FIELD,  with  whom  concurred  the  CHIEF  JUSTICE  and 
Mr.  Justice  MILLER,  dissenting. 


ALBANY  BREWING  CO.  V.  MERIDEN. 

Supreme  Court  of  Errors  of  Connecticut.    June,  1880. 
48  Connecticut  243. 

Bill  in  equity,  to  set  aside  or  postpone  two  tax  liens;  brought  to 
the  Court  of  Common  Pleas  for  New  Haven  County.  Facts  found 
and  case  reserved  for  advice.  The  case  is  fully  stated  in  the  opinion. 

PABDEE,  J.  This  is  a  bill  in  equity;  in  it  the  petitioners  ask  the 
Court  of  Common  Pleas  for  New  Haven  County  either  to  declare 
that  certain  tax  liens  recorded  by  the  town  of  Meriden  against  a 
piece  of  land  therein  belonging  to  them  are  illegal  and  void,  or,  if 
legal,  that  they  are  to  be  postponed  to  their  mortagage  title. 

In  June,  1874,  John  Brady  and  Hugh  Grogan,  then  owning  the 
lot,  mortgaged  it  to  Moriarty  and  Abell  of  New  Haven;  in  Septem- 
ber, 1876,  Brady  conveyed  his  interest  to  Grogan;  in  March,  1877, 
the  latter  conveyed  it  to  his  assignee  in  bankruptcy,  who  sold  it  at 
public  auction  on  July  27,  1877,  to  C.  C.  Herbert,  who  purchased 
it  as  agent  for  the  petitioners;  the  latter  subsequently  bought  the 
mortgage. 

At  the  public  sale  the  assignee  gave  notice  in  hearing  of  Herbert, 
that  the  taxes  hereinafter  mentioned  were  an  incumbrance  upon  the 
property,  and  he  accepted  a  deed  in  which  they  were  specified  as  such. 


490  THE  COLLECTION  OF  THE  TAX. 

During  the  years  1874-5-6,  Brady  and  Grogan  were  the  joint  owners 
of  this  and  four  separate  pieces  of  land  in  the  town  of  Meriden,  also 
of  personal  property  valued  at  about  $1,000.  In  each  of  those  years 
they  made  and  delivered  to  the  assessors  a  list  of  their  property  for 
purposes  of  taxation,  in  each  of  which  they  made  one  item  of  their 
separate  pieces  of  land  and  named  one  sum  as  the  value  of  all.  If 
the  taxpayer  chooses  to  list  and  value  separate  pieces  of  land  as  one, 
and  thus  invite  an  assessment  thereon  as  one,  and  the  assessors  accept 
the  list  and  accede  to  the  request,  it  is  not  for  him  nor  for  any  grantee 
of  his  to  complain  after  all  opportunity  for  separate  assessment  has 
passed. 

Up  to  the  time  of  his  bankruptcy  Grogan  was  in  possession  of  per- 
sonal property  sufficient  to  pay  these  taxes;  during  a  portion  of  the 
time  prior  to  October,  1877,  and  during  all  of  the  time  since,  Brady 
has  been  in  possession  of  personal  property  sufficient  to  pay  them. 
The  collector  demanded  payment  from  each,  but  having  no  knowledge 
of  the  possession  of  personal  property  by  either,  no  steps  were  taken 
to  enforce  or  secure  payment  other  than  the  filing  of  notice  of  a  lien. 

The  tax  upon  the  list  of  1874  became  payable  on  April  20th,  1875 ; 
and  the  tax  upon  the  list  of  1875  on  April  21st,  1876.  Upon  April 
19th,  1876,  the  selectmen  of  Meriden  recorded  a  lien  against  the  lot 
for  the  first,  and  upon  April  20th,  1877,  another  for  the  last  of 
these  taxes.  These  were  assessed  upon  all  of  the  estate,  real 
and  personal,  of  Brady  and  Grogan.  The  liens  were  filed  under  the 
statute  (Gen.  Stats.,  p.  163,  sees.  15  and  16,)  which  provides  that 
"real  estate,  owned  by  any  person  in  fee  or  for  life  or  for  a  term 
of  years,  by  gift  or  by  devise  and  not  by  contract,  shall  stand  charged 
with  his  lawful  taxes  in  preference  to  any  other  lien,  and  may  be  sold 
for  the  same  and  costs  of  collection  within  one  year  after  the  taxes 
become  due,  notwithstanding  any  transfer  thereof,  or  any  levy  of 
attachment  or  execution  thereon;  and  shall  after  the  expiration  of 
such  year,  and  before  any  such  transfer  or  levy,  remain  liable  for  the 
payment  of  such  taxes  and  costs  until  paid ;  but  no  real  estate  so  trans- 
ferred or  levied  upon  shall  be  sold  for  the  payment  of  any  taxes  laid 
upon  a  list  made  after  such  transfer  or  levy,  nor  shall  any  real  estate, 
legally  transferred,  attached  or  taken  by  execution,  be  sold  for  taxes 
when  other  estate  can  be  found  sufficient  to  pay  them  and  the  legal 
costs."  .  .  .  "The  selectmen  of  any  town  may  continue  any  tax 
lien  upon  any  real  estate  therein  for  not  more  than  ten  years  after 
the  tax  becomes  payable,  by  recording  in  the  land  records  of  the 
town  within  the  first  year  of  said  period  their  certificate,  describing 
the  real  estate,  the  amount  of  the  tax  and  the  time  when  it  became 


ALBANY  BKEWIXG  CO.  V.  MERIDEN.  491 

due;  and  thereupon  such  tax  shall  remain  a  lien  upon  such  land  at 
interest  at  seven  per  cent,  a  year,  and  said  land  may  at  any  time 
during  said  period  be  sold  for  said  tax  in  the  same  manner  as  if  sold 
within  said  first  year." 

This  statute  authorized  the  imposition  upon  one  piece  of  land  of  a 
lien  for  all  taxes  legally  assessed  against  the  owner  thereof,  not  only 
upon  that  but  upon  any  other  land  or  property  belonging  to  him. 

For  the  period  of  one  year  from  the  several  dates  when  they  be- 
came payable,  the  taxes  took  precedence  of  every  other  lien  upon  the 
real  estate  of  Brady  and  Grogan,  and  the  same  might  have  been  taken 
therefor  without  regard  to  the  transfer  thereof  or  the  levy  of  an  execu- 
tion thereon;  within  that  period  and  while  that  lien  was  in  full  force 
the  selectmen  legally  gave  to  it  the  statutory  extension  of  ten  years, 
thus  preserving  to  it  during  that  period  the  priority  which  it  enjoyed 
during  the  first  year  of  its  existence.  This  lien  with  its  extension  is  a 
statutory  creation;  it  stands  quite  apart  from  the  matter  of  selling 
land  upon  a  tax-warrant,  and  is  not  encumbered  by  any  proviso  as  to 
the  possession  of  other  property.  It  is  a  concession  to  the  taxpayer. 
The  State  waives  its  right  to  immediate  payment  by  a  forced  sale,  and 
accepts  a  first  mortgage  for  ten  years.  All  that  the  statute  has  made 
necessary  to  its  validity  is  a  legal  assessment  and  a  proper  and  timely 
record  of  the  lien. 

This  lien  takes  precedence  of  all  others;  mortgages  take  their 
security  with  knowledge  that  the  sovereignty  must  and  will  take  by 
taxation  all  that  is  necessary  to  the  preservation  of  its  own  life;  the 
life  of  the  State  is  of  higher  concern  than  the  protection  of  a  debt  due 
to  an  individual  member  of  it.  Therefore  every  piece  of  real  estate 
must  contribute  its  fair  proportion  to  the  public  treasury  if  the  au- 
thorities move  within  a  specific  time  and  according  to  statutory 
methods;  and  this  regardless  of  mortgagees  or  purchasers. 

We  advise  the  Court  of  Common  Pleas  to  dismiss  the  petition. 

In  this  opinion  the  other  judges  concurred. 


THE  COLLECTION  OF  THE  TAX. 


KING  V.  MULLINS. 

Supreme  Court  of  the  United  States.    October,  1897. 
171  U.  8. 


Mr.  Justice  HARLAN  delivered  the  opinion  of  the  court. 

This  action  of  ejectment  was  brought  to  recover  that  part  lying 
in  the  state  of  West  Virginia  of  a  tract  of  500,000  acres  of  land 
patented  by  the  commonwealth  of  Virginia  in  1795  to  Robert  Morris, 
assignee  of  Wilson  Gary  Nicholas. 

At  the  trial  in  the  circuit  court  the  plaintiff  introduced  in  evi- 
dence the  patent  to  Morris  showing  that  the  lands  therein  described 
were  granted  without  conditions.  Evidence  was  also  introduced  tend- 
ing to  show  that  by  sundry  mesne  conveyances  and  legislative  and 
judicial  proceedings  the  title  of  Morris  became  vested,  in  1866,  in 
Robert  Randall,  trustee;  in  John  R.  Reed,  trustee,  on  the  29th  day 
of  June,  1886  ;  and  through  sundry  mesne  conveyances  by  Reed,  trus- 
tee, David  W.  Armstrong  and  John  V.  LeMoyne  in  the  plaintiff  King 
on  the  27th  day  of  December,  1893. 

The  defendants  resisted  the  claim  of  the  plaintiff  upon  the  general 
ground  that  prior  to  the  date  of  the  deed  from  LeMoyne,  the  lands 
embraced  in  the  patent  were  absolutely  forfeited  to  the  state,  and  were 
so  forfeited  when  the  present  action  was  instituted. 

The  controlling  question  in  this  case  relates  to  the  validity  under 
the  Constitution  of  the  United  States  of  certain  provisions  in  the 
constitution  and  statutes  of  West  Virginia  for  the  forfeiture  of  lands 
by  reason  of  the  failure  of  the  owners  during  a  given  period  to  have 
them  placed  upon  the  proper  land  books  for  taxation. 

The  question  of  constitutional  law  thus  presented  is  one  of  unusual 
gravity.  On  the  one  hand,  it  must  not  be  forgotten  that  the  clause 
of  the  National  Constitution  which  this  court  is  now  asked  to  in- 
terpret is  a  part  of  the  supreme  law  of  the  land,  and  that  it  must  be 
given  full  .  force  and  effect  throughout  the  entire  Union.  The  due 
process  of  law,  enjoined  by  the  Fourteenth  Amendment  must  mean 
the  same  thing  in  all  the  States.  On  the  other  hand,  a  decision  of 
this  court  declaring  that  the  amendment  forbids  a  State,  by  force  alone 
of  its  constitution  or  statutes,  and  without  inquisition  or  inquiry 
in  any  form,  to  take  to  itself  the  absolute  title  to  lands  of  the  citizen 
because  of  his  failure  to  put  them  on  record  for  taxation,  or  to  pay 


KING  V.  MULLINS.  493 

the  taxes  thereon,  might  greatly  disturb  the  land  titles  of  two  States 
under  a  system  which  has  long  beens  upheld  and  enforced  by  their 
respective  legislatures  and  courts.  Under  these  circumstances,  our 
duty  is  not  to  go  beyond  what  is  necessary  to  the  decision  of  the  par- 
ticular case  before  us.  If  the  rights  of  the  parties  in  this  case  can 
be  fully  determined  without  passing  upon  the  general  question  whether 
the  clause  of  the  West  Virginia  constitution  in  question,  alone  con- 
sidered, is  consistent  with  the  national  constitution,  that  question  may 
properly  be  left  for  examination  until  it  arises  in  some  case  in  which 
it  must  be  decided. 

We  come  then  to  inquire  whether,  looking  at  the  constitution  and 
the  statutes  of  West  Virginia  together,  a  remedy  was  not  provided 
which,  if  pursued,  furnished  to  the  plaintiff  and  those  under  whom 
he  asserts  title  all  the  opportunity  that  "due  process  of  law"  required 
in  order  to  vindicate  any  rights  that  he  or  they  had  in  respect  of  the 
lands  in  question. 

It  thus  appears  that  when  the  lands  in  question  and  others  em- 
braced in  the  Morris  patent  were,  as  is  contended,  forfeited  to  the 
state  for  the  failure  of  the  owner  during  the  five  consecutive  years 
after  they  were  redeemed  by  Randall,  trustee,  in  1883,  to  have  them 
entered  upon  the  land  books  of  the  proper  county  and  charged  with 
the  taxes  thereon,  it  was  provided  by  the  statutes  of  West  Virginia: 

That  all  lands  thus  forfeited  to  the  State  should  be  sold  for  the 
benefit  of  the  school  fund; 

That  the  sale  should  be  sought  by  petition  filed  by  the  commis- 
sioner of  school  lands  in  the  proper  Circuit  Court,  to  which  proceed- 
ing all  claimants  should  be  made  parties,  and  be  brought  in  by  personal 
service  of  summons  upon  all  found  in  the  county,  or  by  publication 
as  to  those  who  could  not  be  found ; 

That  the  petition  should  be  referred  to  a  commissioner  in  chancery, 
who  should  report  upon  the  same  and  upon  such  other  things  as 
the  court  might  direct,  and  particularly  as  to  the  amount  of  taxes 
due  and  unpaid  upon  any  lands  mentioned  in  the  petition,  in  whose 
name  and  when  and  how  forfeited,  and  in  whom  the  legal  title  was  at 
the  time  of  the  forfeiture ; 

That  if  there  were  no  exceptions  to  the  report,  or  if  there  were  ex- 
•ceptions  which  were  overruled,  the  court  was  required  to  confirm  the 
same  and  decree  a  sale  of  the  lands  for  the  benefit  of  the  school  fund  •, 
and, 

That  at  any  time  during  the  pendency  of  the  proceedings  insti- 
tuted for  the  sale  of  forfeited  lands  for  the  benefit  of  the  school 


494  THE  COLLECTION  OF  THE  TAX. 

fund,  the  owner,  or  any  creditor  of  the  owner  having  a  lien  thereon, 
might  file  his  petition  in  the  Circuit  Court  of  the  county  for  the 
redemption  of  his  lands  upon  the  payment  into  court,  or  to  the  com- 
missioner of  school  lands,  of  all  costs,  taxes  and  interest  due  thereon, 
and  obtain  a  decree  or  order  declaring  the  lands  redeemed  so  far  as 
the  title  thereto  was  in  the  State  immediately  before  the  date  of  such 
order. 

If,  as  contended,  the  State  without  an  inquisition  or  proceeding  of 
some  kind  declaring  a  forfeiture  of  lands  for  failure  during  a  named 
period  to  list  them  for  taxation,  and  by  force  alone  of  its  constitution 
or  statutes,  could  not  take  the  absolute  title  to  such  lands,  still  it  was 
in  its  power  by  legislation  to  provide,  as  it  did,  a  mode  in  which  the 
attempted  forfeiture  or  liability  to  forfeiture  could  be  removed  and 
the  owner  enabled  to  retain  the  full  possession  of  and  title  to  his 
lands. 

We  should  therefore  look  to  the  constitution  and  statutes  of  the 
State  together  for  the  purpose  of  ascertaining  whether  the  system 
of  taxation  established  by  the  State  was,  in  its  essential  features,  con- 
sistent with  due  process  of  law.  If,  in  addition  to  the  provisions 
contained  in  the  constitution,  that  instrument  had  itself  provided  for 
the  sale  of  forfeited  lands  for  the  benefit  of  the  school  fund,  but  re- 
served the  right  to  the  owner,  before  sale  and  within  a  reasonable 
period,  to  pay  the  taxes  and  charges  due  thereon,  and  thereby  relieve 
his  land  from  forfeiture,  we  do  not  suppose  that  such  a  system  would 
be  held  to  be  inconsistent  with  due  process  of  law.  If  this  be  true, 
it  would  seem  to  follow  necessarily  that  if  the  statutes  of  the  State, 
in  connection  with  the  constitution,  gave  the  taxpayer  reasonable  op- 
portunity to  protect  his  lands  against  a  forfeiture  arising  from  his 
failure  to  place  them  upon  the  land  books,  there  is  no  ground  for 
him  to  complain  that  his  property  has  been  taken  without  due  pro- 
cess of  law. 

Much  of  the  argument  on  the  behalf  of  the  plaintiff  proceeds  upon 
the  erroneous  theory  that  all  the  principles  involved  in  due  process 
of  law  as  applied  to  proceedings  strictly  judicial  in  their  nature 
apply  equally  to  proceedings  for  the  collection  of  public  revenue  by 
taxation.  On  the  contrary,  it  is  well  settled  that  very  summary 
remedies  may  be  used  in  the  collection  of  taxes  that  could  not  be- 
applied  in  cases  of  a  judicial  character. 

It  thus  appears  that  under  the  statutes  of  West  Virginia  in  force 
after  188?  the  owner  of  the  forfeited  lands  had  the  right  to  become 


KING  V.  MULLINS.  49o 

a  party  to  a  judicial  proceeding,  of  which  he  was  entitled  to  notice, 
and  in  which  the  court  had  authority  to  relieve  him,  upon  terms 
that  were  reasonable,  from  the  forfeiture  of  his  lands. 

It  is  said  that  the  landowner  will  be  without  remedy  if  the  com- 
missioner of  the  school  fund  should  fail  to  institute  proceedings  in 
which  the  statute  permitted  such  owner  to  intervene  by  petition  and 
obtain  a  redemption  of  his  lands  from  the  forfeiture  claimed  by  the 
State.  It  cannot  be  assumed  that  the  commissioner  will  neglect  to 
discharge  a  duty  expressly  imposed  upon  him  by  law,  nor  that  the 
courts  are  without  power  to  compel  him  to  act,  where  his  action  be- 
comes necessary  for  the  protection  of  the  rights  of  the  landowner. 

It  is  further  said  that  a  forfeiture  may  arise  under  the  constitution 
of  West  Virginia  despite  any  effort  of  the  landowner  to  prevent  it; 
that  although  the  owner  may  direct  his  lands  to  be  entered  on  the 
proper  land  books,  and  that  he  be  charged  with  the  taxes  due  thereon, 
the  custodian  of  such  books  may  neglect  to  perform  his  duty.  Thus, 
it  is  argued,  the  lands  may  be  forfeited  by  reason  of  the  landowner 
not  having  been,  in  fact,  charged  on  the  land  books  with  the  taxes 
due  from  him,  •  although  he  was  not  responsible  for  such  neglect. 
We  do  not  so  interpret  the  state  constitution  or  the  statutes  enacted 
under  it.  If  the  landowner  does  all  that  is  reasonably  in  his  power 
to  have  his  lands  entered  upon  the  land  books  and  to  cause  himself 
to  be  charged  with  taxes  thereon,  no  forfeiture  can  arise  from  the 
owner  not  having  been  "charged  on  such  books"  with  the  state  tax. 
The  state  could  not  acquire  any  title  to  the  lands  merely  through  the 
neglect  of  its  agent  having  custody  or  control  of  its  land  books.  Any 
steps  attempted  to  be  taken  by  the  officers  of  the  state  based  upon 
such  neglect  of  its  agent — the  taxpayer  not  being  in  default — would 
be  without  legal  sanction,  and  could  be  restrained  by  any  court  hav- 
ing jurisdiction  in  the  premises.  We  go  further  and  say,  that  any 
sale  had  under  the  statute  providing  for  a  sale,  under  the  order  of 
court,  for  the  benefit  of  the  school  fund,  of  lands  alleged  to  be  for- 
feited by  reason  of  their  not  having  been  charged  on  the  land  books 
for  five  consecutive  years  with  the  state  tax  due  thereon,  would  be 
absolutely  void,  if  the  landowner  was  not  before  the  court,  and  had 
not  been  duly  notified  of  the  proceedings,  but  had  done  all  that  he 
could  reasonably  do  to  have  his  lands  entered  on  the  proper  books  and 
to  cause  himself  to  be  charged  with  the  taxes  due  thereon.  If  the 
state  was  not  entitled  to  treat  them  as  forfeited  lands,  that  fact  could 
be  shown  in  the  proceeding  instituted  for  their  sale  as  lands  of  that 
character,  and  the  rights  of  the  owner  fully  protected.  In  the  pres- 
ent case  it  does  not  appear  that  any  evidence  was  offered  tending  to 


196  THE  COLLECTION  OF  THE  TAX. 

show  that  the  absence  from  the  land  books  of  any  charge  of  taxes  on 
the  lauds  claimed  by  the  plaintiff  during  five  consecutive  years  after 
their  redemption  by  Randall,  trustee,  in  1883  was  due  to  any  neglect 
of  the  officers  of  the  State,  or  that  the  plaintiff,  or  those  under  whom 
he  asserts  title,  entered  or  attempted  to  enter  the  lands  upon  the 
land  books,  or  that  he  or  they  caused  or  attempted  to  cause  the  lands 
to  be  charged  with  taxes  thereon.  But  there  was  evidence  tending 
to  show  that  the  requirements  of  the  constitution  were  not  met  dur- 
ing any  of  the  years  from  1883  to  the  bringing  of  this  action.  So 
far  as  the  record  discloses,  it  is  a  case  of  sheer  neglect  upon  the 
part  of  the  landowner  to  perform  the  duty  required  of  him  by  the 
constitution  and  statutes  of  the  State. 

For  the  reasons  stated,  we  hold  that  the  system  established  by 
West  Virginia,  under  which  lands  liable  to  taxation  are  forfeited  to 
the  State  by  reason  of  the  owner  not  having  them  placed  or  caused 
to  be  placed  during  five  consecutive  years,  on  the  proper  land  books 
for  taxation,  and  caused  himself  to  be  charged  with  the  taxes  there- 
on, and  under  which,  on  petition  required  to  be  filed  by  the  repre- 
sentative of  the  State  in  the  proper  Circuit  Court,  such  lands  are 
sold  for  the  benefit  of  the  school  fund,  with  liberty  to  the  owner, 
upon  due  notice  of  the  proceeding,  to  intervene  by  petition  and  secure 
a  redemption  of  his  lands  from  the  forfeiture  declared  by  paying  the 
taxes  and  charges  due  upon  them,  is  not  inconsistent  with  the  due 
process  of  law  required  by  the  Constitution  of  the  United  States  or 
the  constitution  of  the  State. 

Having  discussed  all  the  points  suggested  by  the  assignments  of 
error  which  we  deem  it  necessary  to  examine,  we  conclude  this  opinion 
by  saying  that  as  neither  the  plaintiff  nor  those  under  whom  he 
claims  title  availed  themselves  of  the  remedy  provided  by  the  statutes 
of  West  Virginia  for  removing  the  forfeiture  arising  from  the  fact 
that,  during  the  years  1884,  1885,  1886,  1887  and  1888,  the  lands  in 
question  were  not  charged  on  the  proper  land  books  with  the  state  taxes 
thereon  for  that  period  or  any  part  thereof,  the  forfeiture  of  such 
lands  to  the  State  was  not  displaced  or  discharged,  and  the  Circuit 
Court  properly  directed  the  jury  to  find  a  verdict  for  the  defendants. 
The  plaintiff  was  entitled  to  recover  only  on  the  strength  of  his  own 
title.  Whether  the  defendants  had  a  good  title  or  not  the  plaintiff 
had  no  such  interest  in  or  claim  to  the  lands  as  enabled  him  to  main- 
tain this  action  of  ejectment.  We  concur  in  what  the  Supreme  Court 
of  Appeals  of  Virginia  said  in  a  case  recently  decided :  "In  an  action 
of  ejectment  the  plaintiff  must  recover  on  the  strength  of  his  own 


PALMER  V.  McMAHON.  497 

title,  and  if  it  appear  that  the  legal  title  is  in  another,  whether  that 
other  be  the  defendant,  the  Commonwealth,  or  some  third  person, 
it  is  sufficient  to  defeat  the  plaintiff.  It  appears  that  the  title  has 
been  forfeited  to  the  Commonwealth  for  the  nonpayment  of  taxes, 
or  other  cause,  and  there  is  no  evidence  that  it  has  been  redeemed 
by  the  owner,  or  resold,  or  regranted  by  the  Commonwealth,  the  pre- 
sumption is  that  the  title  is  still  outstanding  in  the  Commonwealth." 
Reusens  v.  Lawson,  91  Virginia  226. 

The  judgment  of  the  circuit  court  of  the  United  States  is 

Affirmed. 


III.    ARREST  AND  IMPRISONMENT. 
PALMER  V.  McMAHON. 

Supreme  Court  of  the  United  States.    October,  1889. 
133  U.  S.  -660. 

This  was  a  writ  of  error  to  the  Court  of  Common  Pleas  for  the 
city  and  county  of  Xew  York  to  review  a  judgment  and  order  find- 
ing Francis  A.  Palmer  guilty  of  misconduct  in  neglecting  to  pay 
personal  taxes  assessed,  imposed  and  confirmed  against  him  for  the 
year  1881,  and  ordering  that  he  stand  committed  until  he  should  have 
paid  the  amount  of  the  said  taxes,  with  interest  and  costs,  unless 
the  court  should  see  fit  sooner  to  discharge  him,  which  judgment 
and  order  was  rendered  in  a  proceeding  brought  under  the  provisions 
of  chapter  230  of  the  laws  of  the  state  of  New  York  of  1843,  Art.  2, 
sections  12  and  13. 

Mr.  Chief  Justice  FULLER  delivered  the  opinion  of  the  court. 

We  are  bound  by  the  decision  of  the  court  of  appeals  of  the  State 
of  New  York  adversely  to  the  plaintiff  in  error,  as  to  failure  to  com- 
ply with  the  state  statute  in  relation  to  the  method  of  procedure,  form 
of  assessment,  oath  of  assessors,  etc.,  in  respect  to  which  it  may  be 
further  remarked  that  the  attack  in  this  case  is  in  its  nature  collateral. 
Stanley  v.  Supervisors  121  U.  S.  535;  Supervisors  v.  Stanley,  105 
TJ.  S.  305.  We  proceed  to  examine  therefore  whether  the  assessment 
was  invalid  because  the  statute  under  which  it  was  laid  contravened 
the  Constitution  or  laws  of  the  United  States,  and  whether  the  pro- 
ceedings authorized  by  chapter  230  of  the  laws  of  1843,  operated  to 
32 


498  THE  COLLECTION  OF  THE  TAX. 

deprive  the  citizen  of  liberty  or  property  without  due  process  of  law. 

It  is  argued  that  chapter  230  of  the  laws  of  New  York  of  1843  is 
unconstitutional,  as  depriving  the  plaintiff  in  error  of  liberty  and 
property  without  due  process  of  law,  and  of  the  equal  protection  of 
the  laws,  in  violation  of  the  Fourteenth  Amendment  to  the  Consti- 
tution of  the  United  States.  That  amendment  provides,  that  no  state 
"shall  make  or  enforce  any  law  which  shall  abridge  the  privileges  or 
immunities  of  citizens  of  the  United  States;  nor  shall  any  state  de- 
prive any  person  of  life,  liberty  or  property  without  due  process  of 
law,  nor  deny  to  any  person  within  its  jurisdiction  the  equal  protec- 
tion of  the  laws."  It  is  insisted  that  Palmer  had  no  notice  and  no 
opportunity  to  be  heard  or  to  confront  or  cross-examine  the  witnesses 
for  the  taxing  authorities  or  to  subpoena  witnesses  in  his  own  behalf ; 
and  had  not  otherwise  the  protection  afforded  in  a  judicial  trial  upon 
the  merits.  The  phrase  "due  process  of  law"  does  not  necessarily 
mean  a  judicial  proceeding.  "The  nation  from  whom  we  inherit  the 
phrase  'due  process  of  law/  "  said  this  court,  speaking  by  Mr.  Justice 
Miller,  "has  never  relied  upon  the  courts  of  justice  for  the  collection 
of  her  taxes,  though  she  passed  through  a  successful  revolution  in 
resistance  to  unlawful  taxation."  McMillen  v.  Anderson,  95  U.  S. 
37,  41. 

The  power  to  tax  belongs  exclusively  to  the  legislative  branch  of  the 
government,  and  when  the  law  provides  for  a  mode  of  confirming  or 
contesting  the  charge  imposed,  with  such  notice  to  the  person  as  is 
appropriate  to  the  nature  of  the  case,  the  assessment  cannot  be  said 
to  deprive  the  owner  of  his  property  without  due  process  of  law. 
Spencer  v.  Merchant,  125  U.  S.  345;  Walston  v.  Nevin,  128  U.  S. 
578.  The  imposition  of  taxes  is  in  its  nature  administrative  and  not 
judicial,  but  assessors  exercise  quasi  judicial  powers  in  arriving  at  the 
value,  and  opportunity  to  be  heard  should  be  and  is  given  under  all 
just  systems  of  taxation  according  to  value. 

It  is  enough,  however,  if  the  law  provides  for  a  board  of  revision 
authorized  to  hear  complaints  respecting  the  justice  of  the  assessment 
and  prescribes  the  time  during  which  and  the  place  where  such  com- 
plaints may  be  made.  Hagar  v.  Reclamation  District,  111  U.  S.  701, 
710. 

The  law  of  New  York  gave  opportunity  for  objection  before  the  tax 
commissioners,  Laws  of  New  York,  1859,  c.  302,  section  10,  p.  681, 
and  the  plaintiff  in  error  appeared  and  obtained  a  large  deduction 
from  the  original  valuation.  If  dissatisfied  with  the  final  action  of 
the  commissioners,  he  could  have  had  that  action  reviewed  on  cer- 


COMMONWEALTH  V.   BYRNE.  499 

tiorari.  Laws  of  New  York,  1859,  c.  302,  §  20,  p.  684;  People  v. 
Commissioners,  4  Wall.  244.  But  he  did  not  avail  himself  of  this 
remedy. 

The  proceeding  here  was  purely  an  executive  process  to  collect  the 
tax  after  the  liability  of  the  party  was  finally  fixed. 

Collection  by  distress  and  seizure  of  person  is  of  very  ancient  date, 
Murray's  Lessee  v.  II  ob  ok  en  Land  Company,  18  How.  272 ;  and  coun- 
sel for  defendant  in  error  cites  many  English  statutes,  commencing 
with  the  twelfth  year  of  Henry  VII,  c.  13,  which  in  their  essential 
features  resemble  the  Xew  York  law  upon  the  subject,  one  in  6  Henry 
VIII,  c.  26,  being  strikingly  like  it.  2  Statutes  of  the  Realm  644; 
3  Ib.  156,  230,  516,  812;  4  Ib.  176,  334,  385,  744,  991,  1108,  1247; 
5  Ib.  700;  7  Ib.  567.  Under  the  act  of  1843  commitment  is  not  re- 
sorted to  until  other  means  of  collection  have  failed  and  then  only 
upon  a  showing  of  property  possessed,  not  accessible  to  levy,  but  en- 
abling the  owner  to  pay  if  he  chooses,  this  constituting  such  miscon- 
duct as  justifies  the  order.  That  law  had  been  in  existence  for  more 
than  forty  years  at  the  time  of  this  proceeding.  We  do  not  regard 
the  collection  in  this  way,  founded  on  necessity  and  so  long  recognized 
by  the  State  of  New  York  as  to  be  justifiably  resorted  to  under  the 
circumstances  detailed  in  the  act,  and  operating  alike  on  all  persons 
and  property  similarly  situated,  as  within  the  inhibitions  of  the  Four- 
teenth Amendment. 

The  judgment  is 

Affirmed. 

Mr.  Justice  BLACTHFORD  did  not  take  any  part  in  the  decision  of 
this  case. 


COMMONWEALTH  V.  BYRXK. 

Supreme  Court  of  Appeals  of  Virginia.     January,  1871. 
20  Grattan  165. 

MONCURE,  P.  The  petitioner  does  not  claim  his  discharge  from 
imprisonment  upon  the  ground  that  the  Legislature  had  not  a  right 
to  impose  the  tax,  for  the  non-payment  of  which  he  was  arrested; 
nor  upon  the  ground  that  he  did  not  use  and  enjoy  the  privilege  on 
which  the  tax  was  imposed ;  nor  upon  the  ground  that  he  has  paid  the 
tax,  or  any  part  of  it ;  nor  upon  the  ground  that,  at  the  time  of  his 
arrest,  he  had  any  property  out  of  which  the  tax,  or  any  part  of  it, 


500  THE  COLLECTION  OF  THE  TAX. 

could  have  been  made  by  a  levy  thereon.  He  does  not  even  show, 
or  say,  that  he  has  not,  in  his  pocket,  or  at  his  command,  the  means 
of  paying  the  tax.  But  he  places  his  defence  upon  the  grounds: 
First.  That  the  law  authorizing  an  arrest  and  imprisonment  in 
such  cases  is  unconstitutional  and  void,  because  contrary  to  the  consti- 
tutions both  of  the  United  States  and  of  this  State. 

First,  as  to  the  constitutionality  of  the  law  under  which  the  peti- 
tioner was  arrested. 

That  law  is  the  63d  section  of  chapter  57  of  the  acts  of  the  General 
Assembly,  passed  at  the  session  of  1866-67,  Sess.  Acts,  p.  849,  and  is 
in  these  words: 

"63.  Within  ten  days  after  the  commissioner  of  the  revenue  shall 
have  granted  a  certificate  to  obtain  a  license,  he  shall  deliver  to  the 
sheriff  or  other  collector  of  the  taxes  on  such  licenses,  a  list  of  all 
such  certificates,  as  far  as  he  may  have  progressed  with  the  same; 
which  list  shall  be  the  guide  of  the  sheriff  or  collector  in  collecting 
the  taxes  imposed  by  law  on  such  license.  If  the  taxes  be  not  paid, 
the  sheriff  or  collector  shall  distrain,  immediately  upon  the  receipt 
of  such  list,  for  the  amount  with  which  any  person  may  have  been 
assessed;  and  he  mayi  sell,  upon  ten  days'  notice,  so  much  of  such 
person's  property,  subject  to  distress,  as  may  be  necessary  to  pay 
the  taxes  so  assessed,  and  the  cost  attending  its  collection.  If  the 
sheriff  or  collector  shall  be  unable  to  find  sufficient  property  to  satisfy 
the  taxes  so  assessed,  and  the  same  shall  not  be  immediately  paid, 
the  said  sheriff  or  collector  shall  arrest  the  person  so  assessed,  and 
hold  him  in  custody  until  the  payment  is  made,  or  until  he  enter 
into  bond,  with  sufficient  security,  in  a*  penalty  at  least  double  the 
amount  of  the  taxes  so  assessed,  conditioned  for  his  appearance  before 
the  Circuit  court  of  his  county  or  corporation,  to  answer  such  action 
of  debt,  indictment  or  information  as  may  be  brought  against  him, 
and  to  satisfy,  not  only  the  fine  imposed,  but  to  pay  the  taxes  assessed ; 
and  it  shall  be  lawful  for  the  court,  upon  the  trial  of  such  action  of 
debt,  indictment  or  information,  to  render  judgment  upon  such  bond 
for  the  fine  imposed  and  the  taxes  which  may  be  assessed/' 

Is  the  law  in  question  contrary  to  that  Bill  of  Rights  of  Virginia 
which  declares  that  no  man  shall  "be  deprived  of  his  liberty,  except 
by  the  law  of  the  land  or  the  judgment  of  his  peers?" 

That  a  man  may  be  deprived  of  his  liberty  by  the  law  of  the  land 
is  conceded  by  the  very  terms  of  the  provision  just  metinoned.  That 
he  cannot  "be  deprived  of  his  liberty  except  by  the  law  of  the  land," 


COMMONWEALTH  V.   BYKNE.  501 

necessarily  implies  that  he  may  be  deprived  of  it  by  the  law  of  the 
land;  and  this  is  certainly  an  undeniable  fact. 

What,  then,  is  the  meaning  of  these  words,  "law  of  the  land,"  in 
this  connection,  and  do  they  embrace  the  law  under  consideration? 
These  are  the  questions  we  now  have  to  dispose  of. 

The  meaning  of  such  a  provision  has  been  the  sub- 
ject of  consideration  and  decision  in  many  cases.  The  most  import- 
ant of  them  all  seems  to  be  the  case  of  Murray's  lessee,  &c.,  v.  Ho- 
boken  Land  &  Improvement  Co.,  18  How.  U.  S.  R.  272-286,  decided 
by  the  Supreme  Court  of  the  United  States  at  December  Term,  1855. 
Mr.  Justice  Curtis  delivered  the  opinion  of  the  court,  which  was 
unanimous.  In  that  case  it  was  held,  among  other  things,  that  a 
distress  warrant,  issued  by  the  solicitor  of  the  treasury,  under  the 
act  of  Congress  passed  on  the  15th  of  May,  1820,  (3  Stats,  at  Large, 
592),  is  not  inconsistent  with  the  constitution  of  the  United  States; 
that  it  was  an  exercise  of  executive  and  not  of  judicial  power,  ac- 
cording to  the  meaning  of  those  words  in  the  constitution;  and  that 
it  is  not  inconsistent  with  that  part  of  the  constitution  which  prohibits 
a  citizen  from  being  deprived  of  his  liberty  or  property  without  due 
process  of  law. 

After  giving  an  account  of  the  practice  pursued  at  different  times 
in  England  in  such  cases,  the  court  say:  "This  brief  sketch  of  the 
modes  of  proceeding  to  ascertain  and  enforce  payment  of  balances  due 
from  receivers  of  the  revenue  in  England,  is  sufficient  to  show  that 
the  methods  of  ascertaining  the  existence  and  amount  of  such  debts, 
and  compelling  their  payment,  have  varied  widely  from  the  usual 
course  of  the  common  law  on  other  subjects,  and  that  as  respects 
such  debts  due  from  such  officers,  'the  law  of  the  land'  authorizes  the 
employment  of  auditors,  and  an  inquisition  without  notice,  and  a 
species  of  execution,  bearing  a  very  close  resemblance  to  what  is  termed 
a  warrant  of  distress  in  the  act  of  1820,  now  in  question. 

It  is  certain  that  this  diversity  in  "the  law  of  the  land,"  between 
public  defaulters  and  ordinary  debtors,  was  understood  in  this  country, 
and  entered  into  the  legislation  of  the  colonies  and  provinces,  and 
more  especially  of  the  States,  after  the  declaration  of  independence 
and  before  the  formation  of  the  constitution  of  the  United  States. 
Xot  only  was  the  process  of  distress  in  nearly  or  quite  universal  use 
for  the  collection  of  taxes,  but  what  was  generally  termed  a  warrant 
of  distress,  issuing  against  the  body,  goods  and  chattels  of  defaulting 


502  THE  COLLECTION  OF  THE  TAX. 

receivers  of  public  money,  was  issued  to  some  public  officer,  to  whom 
was  committed  the  power  to  ascertain  the  amount  of  the  default,  and 
by  such  warrant  proceed  to  collect  it.  Without  a  wearisome  repetition 
of  details,  it  will  be  sufficient  to  give  one  section  from  the  Massa- 
chusetts act  of  1786."  After  giving  which  the  court  refers  to  similar 
provisions  contained  in  the  acts  of  Connecticut,  Pennsylvania,  South 
Carolina,  New  York,  Virginia  and  Vermont,  passed  before  the  for- 
mation of  the  constitution  of  the  United  States,  and  in  the  acts  of 
Louisiana  and  the  United  States,  passed  since  that  period;  and  then 
say:  "This  legislative  construction  of  the  constitution,  commenc- 
ing so  early  in  the  government,  when  the  first  occasion  for  this  manner 
of  proceeding  arose,  continued  throughout  its  existence  and  repeat- 
edly acted  on  by  the  judiciary  and  the  executive,  is  entitled  to  no 
inconsiderable  weight  upon  the  question,  whether  the  proceeding 
adopted  by  it  was  'due  process  of  law'."  "Tested  by  the  common  and 
statute  law  of  England,  prior  to  the  emigration  of  our  ancestors,  and 
by  the  laws  of  many  of  the  States  at  the  time  of  the  adoption  of  this 
amendment,  the  proceedings  authorized  by  the  act  of  1820,  cannot 
be  denied  to  be  due  process  of  law,  when  applied  to  the  ascertainment 
and  recovery  of  balances  due  to  the  government  from  a  collector  of 
customs,  unless  there  exists  in  the  constitution  some  other  pro- 
vision which  restrains  Congress  from  authorizing  such  proceedings. 
For,  though  'due  process  of  law*  generally  implies  and  includes 
actor,  reus,  judex,  regular  allegations,  opportunity  to  answer,  and 
a  trial  according  to  some  settled  course  of  judicial  proceedings  (2 
Inst.  47,  50;  Holce  v.  Henderson,  4  Dev.  N.  C.  K.  15;  Taylor  v. 
Porter,  4  Hill  E.  140,  146;  Van  Zant  v.  Waddell,  2  Yerg.  E.  260; 
State  Bank  v.  Cooper,  Id.  599 ;  Jones'  Heirs  v.  Perry,  10  Id.  59 ; 
Greene  v.  Briggs,  1  Curtis  C.  C.  E.  311),  yet  this  is  not  universally 
true.  There  may  be,  and  we  have  seen  that  there  are  cases,  under 
the  law  of  England,  after  magna  charta  and  as  it  was  brought  to  this 
country  and  acted  on  here,  in  which  process,  in  its  nature  final,  issues 
against  the  body,  lands  and  goods  of  certain  public  debtors,  without 
any  such  trial;  and  this  brings  us  to  the  question,  whether  these  pro- 
visions of  the  constitution  which  relate  to  the  judicial  power,  are 
incompatible  with  these  proceedings?" 

..The  court  then  proceed  to  examine  this  question,  and  arrive  at 
the  conclusion  that  no  such  incompatibility  exists.  In  the  course 
of  their  remarks  upon  this  subject,  they  say:  "As  we  have  already 
shown,  the  means  provided  by  the  act  of  1820  do  not  differ  in  princi- 
ple from  those  employed  in  England  from  remote  antiquity,  and 
in  many  of  the  States,  so  far  as  we  know,  without  objection,  for  this 


COMMONWEALTH   V.   BYRNE.  503 

purpose,  at  the-  time  the  constitution  was  formed.  It  may  be  added 
that  probably  there  are  few  governments  which  do  or  can  permit  their 
claims  for  public  taxes,  either  on  the  citizen  or  on  the  officer  em- 
ployed for  their  collection  or  disbursement,  to  become  subjects  of 
judicial  controversy,  according  to  the  course  of  the  law  of  the  land. 
Imperative  necessity  has  forced  a  distinction  between  such  claims  and 
all  others,  which  has  sometimes  been  carried  out  by  summary  meth- 
ods of  proceeding,  and  sometimes  by  systems  of  fines  and  penalties, 
but  always  in  some  way  observed  and  yielded  to." 

I  have  made  these  long  quotations,  because  the  case  from  which 
they  are  taken  is  one  of  the  highest  authority,  and  seems  to  be  con- 
clusive of  the  main  point  in  controversy  in  this  case,  and  because 
the  language  of  the  court  in  that  case  expresses  the  views  which  I 
wish  to  present,  much  more  strongly  and  aptly  than  I  can  do,  by  any 
language  of  my  own.  Many  other  cases  may  be  cited  in  support  of  the 
same  views. 

In  Blackwell  on  Tax  Titles,  p.  176,  edition  of  1864,  chapter  9,  the 
writer  says :  "Where  the  person  against  whom  a  tax  has  been  legally 
assessed  neglects  or  refuses  to  pay  the  tax  voluntarily,  after  a  noti- 
fication and  demand  made  by  the  collector  in  the  manner  provided 
by  law,  the  necessities  of  the  State  compel  a  resort  to  coercive  means. 
In  some  States  the  law  requires  the  body  of  the  delinquent  to  be  ar- 
rested and  imprisoned  in  satisfaction  of  the  tax."  Bassett  v.  Porter, 
-i  Cush.  E.  487;  Daggett  v.  Everett,  19  Maine  R.  373;  Rising  v. 
Granger  I  Mass  R.  47;  Appleton  v.  Hopkins,  5  Gray's  R.  530.  "In 
other  States,  the  law  requires  the  tax  to  be  collected  out  of  the  per- 
sonal estate  of  the  delinquent  if  a  sufficiency  can  be  found  to  satisfy 
it.  In  South  Carolina  the  statute  thus  marshals  the  remedies:  1.  A 
distress  of  the  personal  estate  of  the  delinquent;  2.  The  sale  of  the 
land;  3.  The  seizure  and  imprisonment  of  the  body.  Kingman  v. 
Glover,  3  Rich.  R.  27.  A  violation  of  the  order  of  remedies  thus  pre- 
scribed invariably  renders  the  act  of  the  officer  illegal.  It  is  the  policy 
of  the  law  to  resort  to  the  land  itself  only  when  all  other  remedies 
fail  to  enforce  a  satisfaction  of  the  tax.  The  person  or  personal  es- 
tate of  the  delinquent  is  regarded  as  the  primary,  the  land  as  the 
dernier  resort.  The  tax  never  becomes  a  charge  upon  the  land  until 
the  other  remedies  have  been  exhausted."  "The  law  admits  of  no  sub- 
stitution or  change  in  the  order  thus  established.  It  is  therefore 
held  that  the  land  of  the  delinquent  cannot  be  sold  in  those  States 
which  authorize  imprisonment,  if  his  body  can  be  found,  nor  can 
a  resort  be  had  to  the  land,  in  States  where  the  personal  estate  is  re- 


504  THE  COLLECTION  OF  THE  TAX. 

garded  as  the  primary  fund,  as  long  as  a  sufficiency  of  personal  es- 
tate can  be  seized  and  sold  in  satisfaction  of  the  tax:  a  sale  of  the 
land,  under  such  circumstances,  is  illegal  and  void." 

I  presume  no  one  will  contend,  and  I  do  not  understand  the  learned 
counsel  for  defendant  in  error  as  contending  in  this  case,  that  the 
law  in  question  is  unconstitutional  in  authorizing  the  sheriff  or  Kia 
collector  to  distrain  the  property  of  the  person  assessed  with  taxes 
as  therein  mentioned,  if  they  be  not  paid.  The  necessity  of  such  a 
power,  and  its  constant  exercise  from  time  immemorial,  as  we  have 
seen,  places  its  constitutionality  on  an  impregnable  basis.  But  it 
seems  to  be  supposed  that  the  law  is  unconstitutional  in  author- 
izing the  sheriff  or  collector,  if  unable  to  find  sufficient  property  to 
satisfy  the  taxes  so  assessed,  and  the  same  shall  not  be  immediately 
paid,  to  arrest  the  person  so  assessed  and  hold  him  in  custody  until 
the  payment  is  made,  or  until  he  enter  into  bond  with  sufficient  secur- 
ity, as  therein  mentioned.  Why  should  this  power  to  arrest  a  per- 
son so  assessed  make  the  law  unconstitutional  any  more  than  the  power 
to  distrain  his  goods  ?  The  ground  of  the  objection  is  that  a  person 
cannot  be  deprived  of  his  liberty  except  by  the  law  of  the  land.  But 
a  person  cannot  be  deprived  of  his  property,  any  more  than  his  lib- 
erty, except  by  the  law  of  the  land;  and  yet  it  is  well  settled,  and 
must  be  admitted,  that  a  person's  property  may  be  seized  for  non- 
payment of  his  taxes,  upon  the  mere  assessment  of  the  commissioner 
of  the  revenue,  and  without  any  judgment  of  any  court  against  him. 
Why  may  not  his  person  be  arrested  for  the  same  cause,  when  the 
law  expressly  authorizes  such  an  arrest?  We  have  seen  that  the 
authorities  place  the  seizing  of  the  property,  and  arresting  of  the 
person  of  the  tax  debtor,  on  the  same  footing,  in  regard  to  the  con- 
stitutional question  we  are  now  considering;  and  so  they  undoubt- 
edly are.  The  power  to  arrest  the  person  may  not  be  so  often  given 
by  tax  laws  as  the  power  to  distrain  property;  but  a  power  to  arrest 
the  person  is  often  given  by  such  laws,  and  is  sometimes  necessary 
to  make  them  efficient;  and  whenever  it  is  necessary,  the  Legislature, 
which  is)  charged  with  the  important  duty  of  raising  a  revenue  for 
the  support  of  the  government,  may  constitutionally  confer  such 
a  power.  It  is  not  contrary,  as  has  been  shown,  to  the  provision  of 
the  Bill  of  Rights  referred  to,  nor  is  it  contrary  to  any  other  pro- 
vision of  the  constitution.  There  is  no  provision  in  our  constitution, 
as  there  is  in  some  of  the  other  State  constitutions,  which  forbids 
imprisonment  for  debt.  And  it  is  well  known  that,  until  a  recent 
period,  a  person  might  be  imprisoned  in  this  State,  not  only  on 
final  process  in  a  civil  action,  but  on  original  process  in  a  bailable 


COMMONWEALTH  V.   BYRNE.  505 

action,  by  a  mere  endorsement  by  the  plaintiff's  attorney  on  the  proc- 
ess, requiring  bail.  And  though  the  law  has  been  changed  in  this  re- 
spect, yet  the  old  law  may  at  any  time  be  restored,  at  the  will  of 
the  Legislature.  There  is  nothing  in  the  constitution  to  prevent  it. 
Even  if  imprisonment  for  debt  were  forbidden  by  the  constitution, 
such  a  provision  would  not,  I  imagine,  forbid  imprisonment  as  a 
means  of  enforcing  the  payment  of  taxes,  if  the  Legislature  found  it 
necessary  to  resort  to  such  means  in  order  to  raise  a  revenue.  But 
such  a  question  does  not  arise  in  this  case,  and  of  course  is  not  in- 
tended to  be  decided. 

But  it  is  objected  that  imprisonment  might  be  perpetual  under  this 
law,  as  it  makes  no  provision  for  the  discharge  of  the  prisoner,  even 
though  he  be  insolvent. 

If  this  be  true,  it  may  show  the  law  to  be  harsh  in  its  operation, 
but  does  not  therefore  show  it  to  be  unconstitutional.  It  may  be  a 
bad  exercise  of  legislative  discretion,  but  not  an  excess  of  legisla- 
tive power.  The  courts  may  control  the  latter,  but  have  nothing  to 
do  with  the  former. 

But  it  is  said  that  the  law  is  harsh,  and  indeed  unconstitutional, 
in  requiring  the  person  arrested  to  give  bond,  etc.,  for  his  appearance 
before  the  Circuit  court  of  his  county  or  corporation,  to  answer  such 
action  of  debt,  indictment  or  information,  as  may  be  brought  against 
him,  and  to  satisfy,  not  only  the  fine  imposed,  but  the  taxes  assessed. 

The  law  does  not  require  him  to  give  such  a  bond.  He  may  dis- 
charge himself  from  custody  by  payment  of  the  tax.  What  is  said 
about  the  bond  is  for  his  benefit.  He  may  give  the  bond,  and  obtain 
his  discharge  in  that  way,  if  he  cannot,  or  does  not,  choose  to  pay 
the  money.  There  is  nothing  unreasonable  in  the  condition  of  the 
bond  which  he  is  thus  authorized  to  give.  He  has  incurred  a  fine,  for 
which  an  action  for  debt,  or  an  indictment,  or  an  information  lies, 
and  he  also  owes  the  taxes  assessed.  The  condition  of  the  bond  is 
not  to  pay  the  fine  absolutely,  but  to  answer  to  such  action  of  debt, 
indictment  or  information  as  may  be  brought  against  him,  and  to 
satisfy  the  fine  imposed ;  that  is,  the  fine  which  may  be  imposed  on  the 
trial  of  such  action  of  debt,  indictment  or  information;  and  also  to 
pay  the  taxes  assessed. 

I  therefore  think  the  law  under  which  the  petitioner  was  arrested 
is  constitutional. 

A  common  method  of  ensuring  the  payment  of  taxes  is  the  imposition 
of  a  penalty  upon  the  taxpayer  for  failure  to  pay  the  tax,  as  e.  g.,  failure 


506  THE  COLLECTION  OF  THE  TAX. 

to  take  out  the  license  made  necessary  by  law  for  the  conduct  of  a  business 
subjected  to  a  tax,  or  to  do  a  thing  whose  performance  renders  the  collec- 
tion of  the  tax  easier.  Cases  in  this  collection  of  the  imposition  of  such 
penalties  are:  Brown  v.  Maryland,  12  Wheaton  419;  Drexel  v.  Common- 
wealth, 46  Pa.  St.  31 ;  Fairbank  v.  United  States,  181  U.  S.  285 ;  Leloup  v. 
Port  of  Mobile,  127  U.  S.  640;  Metropolitan  Board  of  Excise  v.  Barrie,  34 
N.  Y.  657;  Osborne  v.  Florida,  164  U.  S.  650;  People  v.  Coleman,  4  Cal. 
46;  Robbins  v.  Shelby  County  Taxing  District,  120  U.  S.  489;  State  v. 
Schlier,  3  Heiskell  (Term.),  281;  Waring  v.  Mayor,  8  Wallace  U.  S.  110. 


CHAPTER  XII. 
THE  SALE  OF  LAND  FOR  UNPAID  TAXES. 

I.    WHEN  LAND  MAY  BE  SOLD. 
BEOWN  V.  VEAZIE. 

Supreme  Judicial  Court  of  Maine.     July,  1845. 
25  Maine  359. 

WHITMAN,  C.  J.  It  appears,  that  the  tenant  claims  to  hold  the 
demanded  premises  as  mortgagee  under  Joseph  Smith,  by  deed  bear- 
ing date,  December  28,  1836.  The  tenant,  being  in  possession,  un- 
der a  title  apparently  good,  he  cannot  be  disturbed,  but  by  a  claim- 
ant under  a  title  paramount  to  his.  The  demandant  claims  under 
a  sale  made  for  the  non-payment  of  taxes,  assessed  on  the  premises, 
in  the  town  of  Orono,  in  June,  1839.  His  deed  from  the  collector 
bears  date,  May  9,  1840.  To  substantiate  his  claim  he  introduced, 
at  the  trial,  proof,  supposed  by  him  to  be  sufficient  to  show  the 
legality  of  the  assessment,  and  of  the  proceedings  of  the  collector 
in  making  sale  of  the  premises. 

Sales  of  real  estate,  for  the  non-payment  of  taxes,  must  be  re- 
garded, in  a  great  measure,  as  an  ex  parte  proceeding.  The  owner 
is  to  be  deprived  of  his  land  thereby;  and  a  series  of  acts,  prelimi- 
nary to  the  sale,  are  to  be  performed  to  authorize  it  on  the  part  of 
the  assessors  and  collector,  to  which  his  attention  may  never  have 
been  particularly  called;  and  experience  and  observation  render  it 
notorious,  that  the  amount  paid  by  purchasers,  at  such  sales,  is  uni- 
formly trifling  in  comparison  with  the  real  value  of  the  property 
sold.  In  this  very  instance  the  purchaser,  at  the  collector's  sale, 
bought,  for  less  than  $17,  an  estate,  valued  by  the  assessors  at  $900. 
It  has,  therefore,  been  held,  with  great  propriety,  that,  to  make  out 
a  valid  title,  under  such  sales,  great  strictness  is  to  be  required;  and 
it  must  appear  that  the  provisions  of  law  preparatory  to,  and  au- 
thorizing such  sales,  have  been  punctiliously  complied  with.  The 
counsel  for  the  defendant,  in  this  case,  may  therefore,  be  excusable, 
if  not  commendable,  for  the  astuteness  and  searching  manner  in 

507 


508  SALE  OF  LAND  FOE  UNPAID  TAXES. 

which  he  has  scrutinized  the  doings  of  those  officers,  in  the  instance 
before  us. 

Collectors  have  no  power  to  sell  lands,  by  reason  of  the  non-pay- 
ment of  taxes  assessed  thereon,  except  in  pursuance  of  the  provisions 
contained  in  the  statutes;  and  can  sell  only  in  the  precise  cases  in 
which  it  has  been  so  authorized.  The  statute  of  1821,  c.  116,  §  30, 
provides  for  a  sale  of  real  estate  for  the  non-payment  of  taxes,  no 
one  having  appeared  to  pay  them,  "of  unimproved  lands  of  non-res- 
ident proprietors;"  and  of  "improved  lands  of  proprietors  living 
out  of  the  limits  of  the  State;"  and,  §  31,  provides  for  the  sale,  for 
the  non-payment  of  taxes,  of  improved  lands  of  proprietors,  living 
in  the  State,  but  not  in  the  town  in  which  such  real  estate  lies, 
after  first  giving  the  proprietor  notice  in  writing,  two  months  prior 
to  proceeding  to  sell;  and  by  the  act,  of  1823,  c.  229,  collectors  may 
sell  improved  real  estate,  taxed  to  the  owner  thereof,  for  the  non- 
payment of  his  tax,  assessed  thereon,  whether  he  may  be  living  in 
this  State  or  elsewhere.  These  are  all  the  cases  in  which  a  collector 
can  make  a  valid  sale  of  real  estate,  for  the  non-payment  of  taxes, 
assessed  thereon. 

Now,  was  the  estate  in  question,  in  either  of  these  predicaments? 
It  was  not,  in  the  first  place,  unimproved  land;  for  it  is  apparent, 
that  it  was  a  mere  house  lot,  with  a  house  and  stable  on  it.  Sec- 
ondly, it  was  not  improved  land  of  a  proprietor,  living  out  of  the 
State;  for  the  owner  lived  in  Bangor,  but  ten  or  twelve  miles  from 
it;  thirdly,  no  notice  in  writing  was  given  to  the  owner,  two  months 
before  proceeding  to  make  sale  of  the  estate;  and,  fourthly,  the 
estate  was  not,  as  provided  in  the  statute  of  1823,  taxed  to  the 
owner.  It  was  taxed  as  belonging  to  persons  unknown.  The  stat- 
ute, of  1823,  was  passed  to  authorize  the  taxing  of  land  possessed 
by  a  lessee,  either  to  him  or  to  the  owner  thereof,  unquestionably 
by  name.  It  would  not,  in  common  parlance,  be  taxed  to  him  un- 
less he  were  named  as  the  person  taxed.  Being  so  taxed  he  would 
be  subject  to  other  modes  of  enforcing  payment,  as  by  arrest,  dis- 
traint or  suit.  A  tax  to  persons  unknown  does  not  subject  the 
owner  to  any  compulsory  process,  except  by  the  sale  of  his  land. 
Property  taxed  to  an  individual,  therefore,  must  be  understood  to 
be  to  him  by  name,  and  not  as  a  person  unknown. 

It  seems  to  us  to  be  very  clear,  that  a  collector,  before  he  can 
proceed  to  sell  real  estate,  taxed  to  persons  unknown,  must  ascer- 
tain whether  the  estate  be  improved  or  not.  If  improved,  he  must 
ascertain  whether  the  owner  lives  out  of  the  State  or  not.  If  he 


SLATER  V.  MAXWELL.  509 

lives  in  the  State,  then,  the  collector  must,  before  proceeding  to 
sell  his  land  for  taxes,  give  him  two  months  previous  notice  in 
writing  of  his  liability.  In  this  case  the  estate  being  taxed  to  own- 
ers unknown,  and  being  under  improvements,  and  no  such  notice 
having  been  given,  the  sale  was  unauthorized  and  void. 

Plaintiff  nonsuit. 


SLATER  V.  MAXWELL. 

Supreme  Court  of  the  United  States.    December,  1867. 
6  Wallace  268. 

Appeal  from  the  District  Court  for  Western  Virginia. 

Slater  filed  a  bill  in  that  court  to  compel  one  Maxwell  to  release 
whatever  apparent  right  he,  Maxwell,  might  have  acquired  to  a 
large  tract  of  land  (19,944  acres)  in  Virginia,  under  a  sale  of  the 
same,  made  in  October,  1845,  by  the  sheriff  of  Ritchie  County,  for 
taxes  amounting  to  $30.03,  accrued  for  1841-2-3-4,  and  the  deeds 
executed  upon  such  sale. 

The  court  below  dismissed  the  bill. 

Mr.  Justice  FIELD,  after  stating  the  case,  Delivered  the  opinion  of 
the  court  as  follows: 

The  relief  sought  by  the  bill  in  this  case  is  put  upon  three 
grounds : 

1st.     That  the  sale  was  made  at  a  grossly  inadequate  price. 

2d.     That  the  entire  tract  was  sold  in  one  body;   and — 

3d.  That  competition  at  the  sale  was  prevented  by  the  fraudulent 
declaration  of  the  defendant,  made  to  effect  that  purpose,  that  the 
complainant  would  redeem  the  land  from  the  purchasers. 

The  inadequacy  of  the  price  given  at  the  sale  of  land  for  unpaid 
taxes  thereon,  does  not  constitute  a  valid  objection  to  the  sale.  The 
taxes  levied  upon  property  generally  bear  a  very  slight  proportion 
to  its  value,  and  of  necessity  the  whole  property  must  be  sold,  if  a 
sum  equivalent  to  the  amount  of  the  taxes  is  not  bid  for  a  portion 
of  the  premises. 

The  sale  of  the  entire  tract  in  one  body  would  have  vitiated  the 
proceeding,  if  bids  could  have  been  obtained  upon  an  offer  of  a  part 
of  the  property.  In  this  case  the  answer  avers,  and  the  proof  shows, 
that  the  sheriff  offered  to  sell  a  part  of  each  tract  without  receiving 


510  SALE  OF  LAND  FOR  UNPAID  TAXES. 

a  bid,  and  it  was  only  then  that  the  entire  tract  was  put  up  and 
struck  off  to  the  defendant. 

The  case  must,  therefore,  turn  upon  the  last  ground,  the  alleged 
fraudulent  declaration  of  the  defendant  at  the  sale,  to  prevent  com- 
petition. 

The  allegation  of  the  bill  is,  that  at  the  time  the  land  was  offered 
for  sale  a  great  many  persons  were  present  with  a  view  to  pur- 
chase small  tracts  for  farming  purposes,  but  the  defendant  stated  to 
them  that  the  complainant  would  redeem  his  land  from  the  pur- 
chasers, and  in  that  way  put  down  all  competition,  and  had  the 
entire  property  struck  off  to  him  for  the  amount  of  the  taxes;  and 
that  this  conduct  was  pursued  to  enable  him  to  buy  without  com- 
petition, for  a  trifling  amount,  all  the  land  of  the  complainant. 

The  answer  of  the  defendant  to  the  allegation  is  evasive  and  un- 
satisfactory. It  is  that  he  has  no  recollection  of  making  the  state- 
ment averred,  nor  does  he  believe  he  did,  and  that  he  believes  the 
charge  to  be  untrue. 

Turning  now  to  the  testimony  presented  by  the  record,  we  find 
that  the  allegation  of  the  bill  is  sufficiently  established. 

Such  being  the  case  there  is  no  doubt  that  relief  should  be 
granted  the  complainant.  It  is  essential  to  the  validity  of  tax  sales, 
not  merely  that  they  should  be  conducted  in  conformity  with  the 
requirements  of  the  law,  but  that  they  should  be  conducted  with  en- 
tire fairness.  Perfect  freedom  from  all  influences  likely  to  prevent 
competition  in  the  sale  should  be  in  all  such  cases  strictly  exacted. 
The  owner  is  seldom  present,  and  is  generally  ignorant  of  the  pro- 
ceeding until  too  late  to  prevent  it.  The  tax  usually  bears  a  very 
slight  proportion  to  the  value  of  the  property,  and  thus  a  great 
temptation  is  presented,  to  parties  to  exclude  competition  at  the 
sale,  and  to  prevent  the  owner  from  redeeming  when  the  sale  is 
made.  The  proceeding,  therefore,  should  be  closely  scrutinized,  and 
whenever  it  has  been  characterized  by  fraud  or  unfairness  should 
be  set  aside,  or  the  purchaser  be  required  to  hold  the  title  in  trust 
for  the  owner. 

When  the  objections  to  a  tax  deed  consist  in  the  want  of  con- 
formity to  the  requirements  of  the  statute  in  the  proceedings  at  the 
sale  or  preliminary  to  it,  or  in  the  assessment  of  the  tax,  or  in  any 
like  particulars,  they  may  be  urged  at  law  in  an  action  of  ejectment, 
whether  the  deed  be  the  ground  upon  which  the  recovery  of  tho 
premises  is  sought  by  the  purchaser,  or  be  relied  upon  to  defeat  a 


PARKER  V.  OVERMAN.  511 

recovery  by  the  owner.  In  some  instances  equity  will  interpose  in 
cases  of  this  kind,  as  where  the  deed  is  by  statute  made  evidence  of 
title  in  the  purchaser,  or  the  preliminary  proceedings  are  regular 
upon  their  face,  and  extrinsic  evidence  is  required  to  show  their  in- 
validity. Where,  however,  the  sale  is  not  open  to  objections  of  this 
nature,  but  is  impeached  for  fraud  or  unfair  practices  of  officer  or 
purchaser,  to  the  prejudice  of  the  owner,  a  court  of  equity  is  the 
proper  tribunal  to  afford  relief.  Thus  in  Dudley  v.  Little,  (2  Ham- 
mond 504),  equity  relieved  against  a  tax  sale  and  deed,  where  there 
had  been  a  combination  among  several  persons  that  one  of  them 
should  buy  in  the  land  to  prevent  competition.  (See  also  Yancey 
v.  Hopkins,  1  Mumford  419;  Rowland  v.  Doty,  Harrington's  Chan- 
cery, 3;  Bacon  v.  Conn,  1  Smedes  &  Marshall's  do.  348.) 

It  follows  from  the  views  expressed  that  the  complainant  is  en- 
titled to  a  release  from  the  defendant  of  all  the  right  and  interest 
acquired  by  him  under  the  tax  deeds  in  the  property  owned  by  the 
complainant  at  the  time  of  the  sale.  The  decree  of  the  court  below 
will  therefore  be  REVERSED,  and  the  cause  remanded  with  directions 
to  enter  a  decree  in  accordance  with  this  opinion. 

Decree  accordingly. 


PARKER  V.  OVERMAN. 

Supreme  Court  of  tlie  United  States.    December,  1855. 
18  Howard  137. 

Mr.  Justice  GRIER  delivered  the  opinion  of  the  court. 

As  some  doubts  were  entertained  and  have  been  expressed  by 
some  members  of  the  court,  as  to  its  jurisdiction  in  this  case,  it  will 
be  necessary  to  notice  that  subject  before  proceeding  to  examine  the 
merits  of  the  controversy.  It  had  its  origin  in  the  state  court  of 
Dallas  county,  Arkansas,  sitting  in  chancery.  It  is  a  proceeding 
under  a  statute  of  Arkansas,  prescribing  a  special  remedy  for  the 
confirmation  of  sales  of  land  by  a  sheriff  or  other  public  officer.  Its 
object  is  to  quiet  title.  The  purchaser  at  such  sales  is  authorized 
to  institute  proceedings  by  a  public  notice  in  some  newspaper,  de- 
scribing the  land,  stating  the  authority  under  which  it  was  sold, 
and  "calling  on  all  persons  who  can  set  up  any  right  to  the  lands 
so  purchased,  in  consequence  of  any  informality,  or  any  irregularity 
or  illegality  connected  with  the  sale,  to  show  cause  why  the  sale  so 
made  should  not  be  confirmed." 


51-2  SALE  OF  LAND  FOR  UNPAID  TAXES. 

In  case  no  one  appears  to  contest  the  regularity  of  the  sale,  the 
court  is  required  to  confirm  it,  on  rinding  certain  facts  to  exist.  But 
if  opposition  be  made,  and  it  should  appear  that  the  sale  was  made 
"contrary  to  law,"  it  became  the  duty  of  the  court  to  annul  it.  The 
judgment  or  decree,  in  favor  of  the  grantee  in  the  deed,  operates 
"as  a  complete  bar  against  any  and  all  persons  who  may  thereafter 
claim  such  land,  in  consequence  of  any  informality  or  illegality  in 
the  proceedings." 

In  the  case  before  us,  the  proceeding,  though  special  in  its  form, 
is  in  its  nature  but  the  application  of  a  well-known  chancery  rem- 
edy; it  acts  upon  the  land,  and  may  be  conclusive  as  to  the  title  of 
a  citizen  of  another  State.  He  is  therefore  entitled  to  have  his  suit 
tried  in  this  court,  under  the  same  conditions  as  in  other  suits  or 
controversies. 

What  we  have  already  stated  sufficiently  shows  the  nature  of  the 
present  controversy.  The  decree  appealed  from  "adjudges  the  abso- 
lute title  to  the  land  to  pass  and  be  confirmed  to,  and  vest  in,  said 
William  Overman,  his  heirs,  &c.,  free,  clear,  and  discharged  from 
the  claim  of  said  defendants,  and  all  persons  whatsoever;  and  that 
the  said  sale  thereof  for  taxes,  so  made  by  the  sheriff  of  Dallas 
county  to  said  Overman,  is  hereby  confirmed  in  all  things,  and  said 
defendants  perpetually  enjoined  from  setting  up  or  asserting  any 
claim  thereto,  &c." 

The  plaintiffs  in  error  allege  that  this  decree  is  erroneous,  and 
should  have  been  for  the  defendants  below. 

As  the  present  controversy  is  for  the  purpose  of  giving  an  oppor- 
tunity "to  all  persons  who  can  set  up  any  right  or  title  to  the  land 
so  purchased,  in  consequence  of  any  informality  or  illegality  con- 
nected with  such  sale,"  to  contest  its  validity,  it  would  be  absurd  to 
make  the  deed,  whose  validity  is  in  question,  conclusive  evidence  of 
that  fact.  Consequently,  the  statute  enacts  that  in  this  proceeding 
"the  deed  shall  be  taken  and  considered  by  the  court  as  sufficient 
evidence  of  the  authority  under  which  said  sale  was  made,  the  de- 
scription of  the  land,  and  the  price  at  which  it  was  purchased.  The 
deed  is  to  be  received  as  prima  facie  evidence  of  these  three  facts, 
and  casts  the  burden  of  proof  as  to  them  on  the  defendant.  The 
term  "sufficient"  is  evidently  used  in  the  statute  as  a  synonym  for 
"prima  facie"  and  not  for  "conclusive." 

In  judicial  sales  under  the  process  of  a  court  of  general  jurisdic- 
tion, where  the  owner  of  the  property  is  a  party  to  the  proceedings, 


PARKER  V.  OVERMAN.  513 

and  has  an  opportunity  of  contesting  their  regularity  at  every  step, 
such  objections  cannot  be  heard  to  invalidate  or  annul  the  deed  in 
a  collateral  suit.  But  one  who  claims  title  to  the  property  of  an- 
other under  summary  proceedings  where  a  special  power  has  been 
executed,  as  in  case  of  lands  sold  for  taxes,  is  bound  to  show  every 
fact  necessary  to  give  jurisdiction  and  authority  to  the  officer,  and 
a  strict  compliance  with  all  things  required  by  the  statute. 

The  principal  objection  to  the  regularity  of  the  sale  in  this  case, 
and  the  only  one  necessary  to  be  noticed,  is,  that  the  land  was  not 
legally  assessed.  A  legal  assessment  is  the  foundation  of  the  author- 
ity to  sell;  and  if  this  objection  be  sustained,  it  is  fatal  to  the  deed. 

In  order  to  qualify  the  sheriff  to  fulfil  the  duties  of  assessor,  the 
statute  requires  that,  "on  or  before  the  tenth  day  of  January,  in 
each  year,  the  sheriff  of  each  county  shall  make  and  file  in  the 
office  of  the  clerk  of  the  county  an  affidavit  in  the  following  form," 
&c. :  "And  if  any  sheriff  shall  neglect  to  file  such  affidavit  within 
the  time  prescribed  in  the  preceding  section,  his  office  shall  be 
deemed  vacant,  and  it  shall  be  the  duty  of  the  clerk  of  the  county 
court,  without  delay,  to  notify  the  governor  of  such  vacancy,"  &c. 

The  statute  requires,  also,  "that  on  or  before  the  25th  day  of 
March,  in  each  year,  the  assessor  shall  file  in  the  office  of  the  clerk 
of  the  county  the  original  assessment,  and  immediately  thereafter 
give  notice  that  he  has  filed  it,"  &c.  This  notice  is  required,  that 
the  owner  may  appeal  to  the  county  court  "at  the  next  term  after 
the  25th  day  of  March,  and  have  his  assessment  corrected,  if  it  be  in- 
correct/' If  the  assessor  shall  fail  to  file  his  assessment  within  the 
time  specified  by  this  act,  he  is  deemed  guilty  of  a  misdemeanor 
and  subjected  to  a  fine  of  five  hundred  dollars. 

These  severe  inflictions  upon  the  officer,  for  his  neglect  to  comply 
with  the  exigencies  of  the  act,  indicate  clearly  the  importance  at- 
tached to  his  compliance  in  the  view  of  the  legislature,  and  that  a 
neglect  of  them  would  vitiate  any  subsequent  proceedings,  and  put 
it  out  of  the  power  of  the  sheriff  to  enforce  the  collection  of  taxes 
by  a  sale  of  the  property. 

The  record  shows  that  Peyton  S.  Bethel,  the  then  sheriff  of  the 
county  of  Dallas,  did  not  file  his  oath  as  assessor  on  or  before  the 
10th  of  January,  as  required  by  law.  He  did  file  an  oath  on  the 
15th  of  March,  but  this  was  not  a  compliance  with  the  law,  and 
conferred  no  power  on  him  to  act  as  assessor.  On  the  contrary,  by 
his  neglect  to  comply  with  the  law,  his  office  of  sheriff  became  ipso 
facto  vacated,  and  any  assessment  made  by  him  in  that  year  was 
void,  and  could  not  be  the  foundation  for  a  legal  sale.  The  neglect, 
33 


514  SALE  OF  LAND  FOR  UNPAID  TAXES. 

also,  to  file  his  assessment  and  give  immediate  notice  on  the  25th 
of  March,  so  that  the  purchaser  might  have  his  appeal  at  the  next 
county  court,  was  an  irregularity  which  would  have  avoided  the  sale 
even  if  the  assessment  had  been  legally  made. 

The  statute  makes  the  time  within  which  these  acts  were  to  be 
performed  material;  and  a  strict  and  exact  compliance  with  its 
requirements  is  a  condition  precedent  to  the  vesting  of  any  author- 
ity in  the  officer  to  sell. 

We  are  of  opinion,  therefore,  that  the  sale  of  the  land  of  the  ap- 
pellants was  "contrary  to  law,"  and  that  the  deed  from  Edward  M. 
Harris,  sheriff  and  collector  of  Dallas  county,  to  William  Overman, 
set  forth  and  described  in  the  pleadings  and  exhibits  of  this  case,  is 
void,  and  should  be  annulled. 


II.    REDEMPTION. 
GAULT'S  APPEAL. 

Supreme  Court  of  Pennsylvania.    1859. 
88  Pennsylvania  State,  94' 

Appeal  from  the  District  Court  of  Philadelphia. 

This  was  an  appeal  by  Henry  W.  Gault  from  the  decree  of  the 
court  below,  directing  him  to  reconvey  to  William  L.  Schaffer, 
Charles  J.  Ellis,  and  Samuel  T.  Roberts,  certain  lots  of  ground  in 
the  city  of  Philadelphia,  which  had  been  sold  by  the  sheriff,  under 
a  municipal  claim. 

The  opinion  of  the  court  was  delivered  by 

WOODWARD,  J.  The  question  that  lies  at  the  bottom  of  this  case 
is,  whether  the  llth  section  of  the  Act  of  Assembly  of  13th  May, 
1856,  P.  L.  567,  giving  owners  of  lots  in  Philadelphia  two  years  to 
redeem  from  sales  made  for  municipal  claims,  is  to  be  strictly  or 
liberally  construed. 

The  counsel  for  the  appellant  insist,  that  however  just  and  reason- 
able this  enactment  may  be  in  its  general  operation,  yet  it  ought  to 
be  so  strictly  construed  as  not  to  embrace  this  case,  because  when 
the  sheriff's  sale  was  made  under  which  he  claims,  the  act  of  23d 
January,  1849,  was  in  force,  which  allowed  but  one  year  for  re- 
demption; and  to  apply  the  Act  of  1856  to  this  sale,  would  be  to 


GAULT'S  APPEAL.  515 

give  it  a  retroactive  and  unconstitutional  operation.  They  consider 
this  a  sufficient  reason  to  force  us  upon  a  strict  construction  of  the 
statute,  and  then  they  argue,  with  conclusive  effect,  that  neither  the 
parties  nor  the  case  are  within  the  statute. 

But  are  we  shut  up  to  a  strict  construction  of  the  enactment? 
What  is  its  nature  and  tendency?  If  we  apply  it  to  the  case  before 
us,  do  we  give  it  retroactive  effect,  or  render  it  unconstitutional? 

These  are  interesting  and  important  questions,  and  we  have  given 
them  a  very  attentive  consideration. 

The  enactment  is  a  redemption  law.  It  gives  to  the  owner  of  a 
vacant  lot  sold  for  taxes  in  Philadelphia,  the  same  time  for  redemp- 
tion that  the  Act  of  1815  gives  to  the  owner  of  unseated  lands 
sold  for  taxes  in  the  rural  counties.  It  is,  therefore,  favorable  to 
the  rights  of  property,  and  congenial  to  the  spirit  of  our  general 
legislation.  The  right  of  the  government  to  authorize  the  seizure 
and  sale  of  land  without  notice  to  the  owner,  was  seriously  doubted, 
and  sometimes  stoutly  denied,  in  the  early  history  of  tax  sales  in 
Pennsylvania;  and  the  only  ground  on  which  it  can  be  maintained, 
is  the  absolute  sovereignty  of  the  State  in  the  exercise  of  its  taxing 
power. 

But  it  is  a  severe  exercise  of  power.  To  divest  ownership,  with- 
out personal  notice,  and  without  direct  compensation,  is  the  instance 
in  which  a  constitutional  government  approaches  most  near  to  an 
unrestrained  tyranny.  Whatever  tends  to  modify  this  right  is  favor- 
able to  the  citizen,  and  ought  to  be  liberally  construed,  on  the  prin- 
ciple that  remedial  statutes  are  to  be  beneficially  expounded. 

Redemption  is  the  last  chance  of  the  citizen  to  recover  his  rights 
of  property,  and  yet,  it  is  here,  at  the  point  of  the  owner's  extrem- 
ity, the  appellant's  argument  would  have  us  apply  strictness  of  con- 
struction to  a  statute  made  for  the  owner's  relief.  The  owner  may 
redeem,  says  the  statute;  but,  says  the  appellant,  those  who  offered 
to  redeem  on  the  15th  September,  1858,  were  not  owners  at  the 
time  of  the  sale,  but  became  owners  afterward. 

The  purchaser  shall  reconvey,  says  the  statute;  but  the  appellant 
points  to  the  fact,  that  Eaimond  was  the  purchaser  at  the  sheriff's 
sale,  and  conveyed  to  him,  Gault,  who  is  not  the  purchaser  within 
the  meaning  of  the  statute,  and  therefore  not  subject  to  a  decree  to 
reconvey.  The  act  applies  to  sales  by  the  City,  and  the  appellant 
says  this  was  a  sale  by  the  district  of  Penn. 

Now,  however,  we  might  be  disposed  to  lay  hold  of  such  criticism 
to  prevent  the  operation  of  a  statute  which  proposed  to  divest  titles, 
they  are  not  to  arrest  a  statute  which  has  for  its  object  the  restora- 


516  SALE  OF  LAND  FOR  UNPAID  TAXES. 

iion  of  a  title  to  its  real  owner.  This  would  be  hypercriticism  in 
the  wrong  direction.  We  hold  him  to  be  an  owner  within  the  statute 
who  is  such  when  he  offers  to  redeem.  The  sale  left  in  the  former 
owner  an  equity  of  redemption  at  the  least,  and  that  might  be  con- 
veyed like  any  other  estate,  and  the  grantee  took  it  with  all  the 
rights  and  capacities  of  the  grantor.  He  is  therefore  the  "owner" 
who  holds  the  title  at  the  moment  of  redemption.  Nor  is  the  stat- 
ute to  be  defeated  by  the  purchaser  at  the  public  sale  conveying  his 
rights  to  another  before  the  time  of  redemption.  If  Eaimond  took 
from  the  sheriff  a  legal  title,  and  conveyed  it  to  Gault,  it  was,  never- 
theless, a  defeasible  title — liable  to  be  defeated  by  a  redemption 
within  time — as  much  so  in  the  hands  of  Gault  as  in  those  of  Rai- 
mond.  And  it  was  a  sale  by  the  city.  The  Consolidation  Act  had 
made  the  district  of  Penn  part  of  the  city,  and  on  the  face  of  the 
record  the  proceedings  were  in  the  corporate  name  of  the  district  to 
the  use  of  the  city.  At  the  time  of  the  sale,  therefore,  the  city 
stood  as  the  beneficial  party  upon  the  record — and  that  was  enough 
to  answer  the  terms  of  the  statute. 

Thus  it  is  apparent,  that  it  does  not  require  a  very  large  stretch 
of  construction,  to  bring  the  case  within  this  remedial  statute;  and 
such  as  it  does  require,  we  feel  quite  justified  in  making. 

For  these  reasons  we  are  clear  in  ruling  that  this  was  not  a  sale 
made  prior  to  the  Act  of  1856,  and  that  we  give  the  act  no  retro- 
active effect  in  applying  it  as  we  do. 

The  decree  is  affirmed. 

But  to  redeem  the  owner  must  bring  himself  within  the  provisions  of  the 
statute.  Thus  he  must  redeem  within  the  time  provided.  Nothing  will  excuse 
delay  beyond  the  allotted  time,  not  even  the  existence  of  civil  war.  Finley 
v.  Brown,  22  Iowa  538.  The  only  possible  excuse  would  be  fraud  on  the  part 
of  the  tax  purchaser.  Blanton  v.  Ludding,  30  La.  An.  1232. 


BENNETT  V.  HUNTER. 

Supreme  Court  of  the  United  States.    December,  1869. 
9  Wallace  326. 

By  an  act  of  August  5th,  1861,  (12  Stat.  at  Large  294)  passed  in 
quite  the  early  part  of  the  late  rebellion,  Congress  having  laid  a 
duty  on  incomes,  imposed  a  direct  tax  of  $20,000,000  per  annum 
upon  the  whole  of  the  United  States,  of  which  a  certain  sum  was 
apportioned  to  Virginia 


BENNETT  V.  HUNTER.  517 

Afterwards,  however,  the  rebellion  having  now  become  widespread, 
and  assumed  far  greater  magnitude,  an  act  of  June  ?th,  1862,  (Ib. 
422),  declared  that  when  in  any  State  the  civil  authority  of  the 
government  of  the  United  States  should  be  obstructed  by  insurrec- 
tion or  rebellion,  so  that  the  provisions  of  the  former  statute  could 
not  be  peaceably  executed,  the  direct  taxes  apportioned  by  that  stat- 
ute should  be  apportioned  and  charged  in  each  State  wherein  -the 
civil  authority  was  thus  obstructed,  upon  all  the  lands  situate  there- 
in, respectively,  &c.,  as  the  same  were  enumerated  and  valued  under 
the  last  assessment  and  valuation  thereof  made  under  the  authority 
of  said  state  or  territory  previous  to  January  1st,  1861;  and  every 
parcel  of  the  said  lands,  according  to  the  said  valuation,  was  declared 
to  be  charged,  by  virtue  of  the  act  itself,  with  the  payment  of  so 
much  of  the  whole  tax  laid  and  apportioned  by  said  act  upon  the 
State  wherein  the  same  was  situate,  as  should  bear  the  direct  pro- 
portion to  the  whole  amount  of  the  direct  tax  apportioned  to  said 
State  as  the  value  of  said  parcels  of  land  should,  respectively,  bear 
to  the  whole  valuation  of  the  real  estate  in  the  said  State,  according 
to  the  said  assessment  and  valuation  made  under  the  authority  of 
the  same,  and  in  addition  thereto  with  a  penalty  of  fifty  per  centum 
of  said  tax. 

The  3d  section  allowed  the  owner  or  owners  of  the  lands,  within 
sixty  days  after  the  amount  of  the  tax  charged  thereon,  respectively, 
should  have  been  fixed  by  a  board  of  tax  commissioners  (the  ap- 
pointment of  which  was  provided  for  by  the  act),  to  pay  the  same 
to  the  commissioners,,  and  take  a  certificate  thereof,  by  virtue  of 
which  the  lands  should  be  discharged  from  the  tax. 

Under  this  act  of  the  7th  of  June,  1862 — the  second  of  the  acts 
above  mentioned — a  tax  was  assessed  upon  a  tract  of  land  situate  in 
Alexandria  County,  Virginia,  of  which  one  B.  W.  Hunter  was  then 
owner  for  life,  the  property  in  remainder  being  in  his  son,  and  de- 
fault having  been  made  in  payment,  the  land  was  advertised  for 
sale.  After  advertisement,  but  before  sale,  the  amount  of  the  taxes, 
expenses,  penalties,  and  costs  (the  whole  being  within  $100),  was 
tendered  ~by  a  tenant  in  occupation  of  about  half  of  the  premises, 
to  the  commissioners  appointed  for  the  collection  of  taxes  under  the 
act,  who  refused  to  receive  the  money,  upon  the  ground  that  the 
tender  was  not  made  by  the  owner  of  the  land  in  person.  The  land 
was  then,  January  llth,  1864,  sold,  and  one  Chittenden  became  the 
purchaser,  and  received  a  certificate  from  the  commissioners,  re- 
citing the  sale  and  his  purchase  for  $8000.  He  thereupon  leased 


518  SALE  OF  LAND  FOE  UNPAID  TAXES. 

the  property  to  one  Bennett,  who  went  into  possession.  After  the 
close  of  the  war,  Hunter,  the  son,  who  had  served  as  an  officer  in 
the  rebel  army,  but  against  whose  property  no  proceedings  for  con- 
fiscation had  been  instituted,  and  whose  estate  in  remainder  had  now 
become  absolute,  brought  suit  in  one  of  the  State  courts  of  Virginia 
to  recover  possession  of  the  land.  No  question  was  made  of  his 
right  to  recover  if  his  title  was  not  divested  by  the  sale  for  taxes. 
The  court  in  which  the  suit  was  brought  gave  judgment  in  his 
favor,  and  the  judgment  being  affirmed  by  the  Supreme  Court  of 
Appeals  of  the  commonwealth,  the  other  side  brought  the  case  here 
for  review. 

The  CHIEF  JUSTICE  (CHASE)  delivered  the  opinion  of  the  court. 

The  case  requires  the  consideration  and  determination  of  one 
point  only,  namely,  whether  the  commissioners  under  the  act  could 
make  a  sale  for  taxes,  notwithstanding  a  previous  tender  of  the 
amount  due? 

In  order  to  a  right  understanding  of  the  real  point  in  contro- 
versy, however,  it  will  be  useful  to  notice  briefly  the  occasion  and 
the  objects  of  the  enactments  which  have  given  rise  to  it. 

The  necessities  of  the  war  arising  from  the  rebellion,  demanded 
immediate  provision  of  adequate  funds.  For  this  purpose  Congress 
increased  the  duties  on  customs,  imposed  a  duty  on  incomes,  and 
laid  a  direct  tax  of  twenty  millions  of  dollars  upon  lands.  This 
latter  tax  was  apportioned,  agreeably  to  the  direction  of  the  Con- 
stitution, among  the  several  States,  in  proportion  to  their  respect- 
ive numbers;  and  it  was  provided  that,  if  the  act  could  not  be  car- 
ried into  execution  in  any  State  in  consequence  of  rebellion,  it 
should  be  the  duty  of  the  President  to  proceed,  as  soon  as  the  au- 
thority of  the  United  States  should  be  re-established  therein,  to  col- 
lect both  the  land  tax  and  the  income  tax,  with  six  per  cent  interest. 

The  income  tax  thus  imposed  has  never  been  collected;  but  pro- 
vision was  made  by  the  act  of  June  7th,  1862,  for  the  collection  of 
the  land  tax  in  the  insurgent  States.  This  act,  or  some  similar 
provision,  to  enable  the  President  to  perform  the  duty  devolved 
upon  him  by  the  act  of  1861.  The  acts  of  1861  and  1862  are,  there- 
fore, to  be  construed  together.  The  general  object  of  both  was  the 
same,  namely,  the  raising  of  revenue  by  a  tax  on  land.  The  first 
prescribed  a  mode  of  collection  where  the  authority  of  the  General 
Government  was  acknowledged,  and  no  serious  obstacle  existed  to 
the  execution  of  the  law;  the  second  directed  the  mode  of  collection 
where  this  authority  had  been  overthrown  bv  insurrection,  and  had 


BENNETT  V.  HUNTER.  519 

been  sufficiently  re-established  to  make  collection,  to  some  extent  at 
least,  practicable. 

The  provisions  of  the  latter  were  necessarily  adapted  to  the  pecul- 
iar circumstances  in  which  it  was  to  be  executed,  and  were  in  most' 
respects  more  stringent  than  those  of  the  former.  The  first  act,  for 
example,  directed  the  assessment  of  lands  by  assessors  to  be  ap- 
pointed under  it;  the  second  adopted  the  valuation  made  under  the 
authority  of  the  several  States  prior  to  the  rebellion,  and  charged 
directly  upon  each  parcel  of  lajid  its  proportion  of  the  tax  appor- 
tioned to  the  State.  Under  the  first  act,  delinquent  tax-payers  were 
permitted,  at  any  time  after  advertisement  for  sale,  and  before  ac- 
tual sale,  to  pay  the  amount  assessed  with  ten  per  cent  penalty,  and 
thus  relieve  their  lands.  The  second  act  imposed  on  each  tract,  with- 
out respect  to  delinquency  on  the  part  of  the  owner,  a  penalty  of 
fifty  per  cent  in  addition  of  its  proportion  of  the  tax  upon  the 
State,  and,  it  is  contended,  allowed  payment  only  within  sixty  days 
after  assessment.  In  the  earlier  act  indulgent  provision  was  made 
for  redemption  after  sale;  in  the  latter,  onerous  conditions  were 
imposed  on  such  redemption. 

Without  adverting  further  to  particular  points  of  difference  be- 
tween the  two  acts,  it  may  be  observed  that  their  most  striking  con- 
trast was  in  their  practical  application. 

The  several  adhering  States,  under  the  act  of  1861,  assumed  and 
paid  their  respective  quotas,  and  collected  the  amount  of  the  tax 
from  their  own  citizens  under  their  own  laws,  so  that  in  those  States 
the  machinery  of  the  law  was  never  really  put  in  action;  while  in 
the  insurgent  States  the  act  of  1862,  so  far  as  it  was  executed  at 
all,  was  carried  into  effect  according  to  its  terms  by  the  officials  of 
the  National  government.  In  this  way,  the  citizens  of  the  adhering 
States  were  relieved  from  the  process  of  collection  and  from  pen- 
alties and  forfeitures  for  non-payment,  while  the  citizens  of  the  in- 
surgent States  who  could  not  be  thus  relieved  were  exposed  to  their 
unmitigated  operation. 

Keeping  these  circumstances  in  view,  we  are  to  consider  the  effect 
of  the  sale  for  taxes  made,  as  we  have  already  stated,  to  the  lessor  of 
the  plaintiff.  And  this  must  depend  mainly  upon  the  construction 
to  be  given  to  the  fourth  section  of  the  act  of  1862. 

This  section  provides  "that  the  title  of,  in,  and  to  each  and  every 
piece  and  parcel  of  land  upon  which  said  tax  has  not  been  paid  as 
above  provided,  shall  thereupon  become  forfeited  to  the  United 
States;  and  upon  the  sale  hereinafter  provided  for  shall  vest  in  the 
United  States,  or  in  the  purchasers  at  such  sale,  in  fee  simple,  free 


520  SALE  OF  LAND  FOE  UNPAID  TAXES. 

and  discharged  from  all  prior  liens,  incumbrances,  right,  title,  and 
claim  whatsoever." 

And  we  are  first  to  consider  whether  the  first  clause  of  this  sec- 
tion, proprio  mgore,  worked  a  transfer  to  the  United  States  of  the 
land  declared  to  be  forfeited. 

Now  the  general  principles  of  the  law  of  forfeiture  seem  to  be 
inconsistent  with  such  a  transfer.  Without  pausing  to  inquire 
whether  in  any  case,  the  title  of  a  citizen  to  his  land  can  be  di- 
vested by  forfeiture  and  vested  absolutely  in  the  United  States, 
without  any  inquisition  of  record  or  some  public  transaction  equiv- 
alent to  office  found,  it  is  certainly  proper  to  assume  that  an  act  of 
sovereignty  so  highly  penal  is  not  to  be  inferred  from  language 
capable  of  any  milder  construction  (Fairfax's  Devisee  v.  Hunter's 
Lessee,  7  Cranch.625).  In  the  case  of  lands  forfeited  by  alienage 
the  king  could  not  acquire  an  interest  in  the  lands  except  by  in- 
quest of  office  (3  Bl.  Com.  258).  And  so  of  other  instances,  where 
the  title  of  the  sovereign  was  derived  from  forfeiture.  And  in  the 
case  of  The  United  States  v.  Eepentigny,  (5  Wallace  265),  where 
the  forfeiture  to  the  government  of  lands  arose  from  omission  to 
perform  the  conditions  of  the  grant,  this  court  held  that  before  the 
forfeiture  could  be  consummated  by  reunion  of  the  land  with  the 
public  domain,  "a  judicial  inquiry  should  be  instituted,  or,  in  the 
technical  language  of  the  common  law,  office  found,  or  its  legal 
equivalent,"  should  take  place.  The  court  said  further  that  "a  legis- 
lative act  directing  the  possession  and  appropriation  of  the  land  is 
equivalent  to  office  found." 

Applying  these  principles  to  the  case  in  hand,  it  seems  quite  clear 
that  the  first  clause  of  the  fourth  section  was  not  intended  by  Con- 
gress to  have  the  effect  attributed  to  it,  independently  of  the  second 
clause.  It  does  not  direct  the  possession  and  appropriation  of  the 
land.  It  was  designated,  rather,  as  we  think,  to  declare  the  ground 
of  the  forfeiture  of  the  title,  namely,  non-payment  of  taxes,  while 
the  second  clause  was  intended  to  work  the  actual  investment  of  the 
title  through  a  public  act  of  government  in  the  United  States,  or 
in  the  purchaser  at  the  tax  sale.  The  sale  was  the  public  act,  which 
is  the  equivalent  of  office  found.  What  preceded  the  sale  was  merely 
preliminary,  and,  independently  of  the  sale,  worked  no  divestiture 
of  title.  The  title,  indeed,  was  forfeited  by  non-payment  of  the 
tax;  in  other  words,  it  became  subject  to  be  vested  in  the  United 
States,  and,  upon  public  sale,  became  actually  vested  in  the  United 
States  or  in  any  other  purchaser;  but  not  before  such  public  sale. 


3ENNETT  V.  HUXTER.  521 

It  follows  that  in  the  case  before  us  the  title  remained  in  the  ten- 
ant for  life  with  remainder  to  the  defendant  in  error,  at  least  until 
sale;  though  forfeited,  in  the  sense  just  stated,  to  the  United 
States. 

But  it  has  been  insisted  that  the  right  to  pay  the  tax  and  relieve 
the  land  from  sale  expired  at  the  end  of  sixty  days  after  the  amount 
was  fixed  by  the  proper  authority.  It  does  not  appear  when  the 
amount  was  fixed,  or  when  the  sixty  days  ended.  It  may  be  in- 
ferred, perhaps,  from  the  fact  of  sale,  that  default  for  payment  had 
continued  at  least  through  that  time,  for  otherwise  there  could  have 
been  no  power  to  sell. 

If  this  inference  be  admitted,  however,  it  by  no  means  follows 
that  the  right  to  pay  the  tax  and  have  the  land  discharged  from  it 
expired  with  the  sixty  days.  It  is  more  reasonable  to  suppose  that 
this  right  remained  as  long  as  the  title  of  the  land  remained  in  the 
owner — that  is,  until  after  sale.  And  this  view  is  confirmed  by 
reference  to  another  part  of  the  act.  The  seventh  section  gives  di- 
rection as  to  sales,  the  issue  of  certificates  of  sale  to  purchasers, 
and  proceedings  for  redemption  after  sale,  and  then  provides  that 
"the  certificate  of  sale  shall  only  be  affected,  as  evidence  of  the 
regularity  and  validity  of  sale,  by  establishing  the  fact  that  the  land 
was  not  subject  to  taxes,  or  that  the  taxes  had  been  paid  previous 
to  the  sale,  or  that  the  property  had  been  redeemed  according  to 
the  provisions  of  this  act."  This  provision  makes  it  clear  that  proof 
of  payment  of  taxes  prior  to  the  sale  invalidates  the  certificate,  and 
this  could  not  be  unless  the  right  to  pay  the  tax  continued  until  the 
sale.  This  seems  to  leave  no  doubt  on  the  point  that  the  right  to 
make  such  payment  was  not  strictly  limited  to  sixty  days  after  the 
fixing  of  the  amount  of  the  tax. 

But  to  whom  did  the  right  to  make  this  payment  belong?  The 
obvious  answer  is,  to  the  owner,  either  acting  in  person  or  through 
some  friend  or  agent,  compensated  or  uncompensated.  The  terms 
of  the  act  are,  that  the  owner  or  owners  may  pay;  and  it  is  familiar 
law  that  acts  done  by  one  in  behalf  of  another  are  valid  if  ratified 
either  expressly  or  by  implication,  and  that  such  ratification  will  be 
presumed  in  furtherance  of  justice. 

But  it  is  insisted  that  the  right  of  payment  is  limited  by  the  act 
to  the  actual  owner  in  his  proper  person.  But  we  perceive  no  such 
limitation  in  its  terms.  On  the  contrary,  the  fact  that  the  privilege 
of  redemption  after  sale  is  limited  to  the  owner  or  the  loyal  person 
having  a  lien  or  other  interest,  appearing  in  proper  person  and  tak- 
ing a  prescribed  oath,  appears  to  us  to  afford  an  irresistible  infer- 


522  SALE  OF  LAND  FOR  UNPAID  TAXES. 

ence  that  the  right  of  payment  before  sale  is  not  so  limited.  It  is 
a  right  which,  under  the  act,  belongs  to  the  owner,  and  no  oath  is 
required  in  order  to  its  exercise.  It  is  a  right  to  be  exercised  under 
the  act  as  a  law  for  raising  revenue.  It  is  expressly  distinguished 
from  the  privilege  of  redemption  after  sale  and  complete  divestiture 
of  title,  which  is  accorded  upon  very  different  principles,  and  in 
pursuance  of  a  very  different  policy.  We  cannot  doubt  that  it  might 
properly  be  exercised  by  the  owner  in  person,  or  through  any  other 
person  willing  to  act  in  his  behalf  and  not  disavowed  by  him. 

The  application  of  these  principles  decides  the  case  before  us.  The 
title  and  possession  of  the  land,  at  the  time  of  assessment,  was  in 
B.  W.  Hunter  for  life,  with  remainder  in  fee  to  his  son,  the  defend- 
ant in  error.  The  life  estate  terminated,  and  the  fee  became  vested 
in  1864.  The  sum  due  the  United  States  for  taxes,  penalty,  and 
costs,  was  tendered  to  the  commissioners  before  sale,  and  it  was  their 
duty  to  accept  it.  The  tender  was  not  objected  to  as  insufficient, 
but  was  refused  solely  because  not  made  by  the  owner  in  person. 
The  refusal  not  being  warranted  by  the  act,  the  tender  must  be  held 
good.  The  certificate  of  sale  under  which  the  plaintiff  in  error 
claims  title  cannot,  therefore,  be  sustained.  The  sale  must  be  re- 
garded in  law  as  having  been  made  after  the  payment  of  the  tax,  and 
as  insufficient  to  vest  the  title  to  the  land  in  the  purchaser. 

It  follows  that  ,the  judgment  of  the  court  of  appeals  of  Virginia 
must  be 

Affirmed. 


III.    EFFECT  OF  TAX  DEED. 
TURNER  V.  SMITH. 

Supreme  Court  of  the  United  States.     December,  1871. 
14  Wallace  553. 

Hannon  being  owner  in  fee  simple  and  free  from  lien  of  a 
house  and  lot  in  Alexandria,  granted  out  of  it  by  an  old-fashioned 
formal  ground-rent  deed,  with  clause  of  right  of  re-entry,  etc.,  in 
1819,  a  rent  charge  of  $224  to  Moore,  with  right  of  distress,  re-entry, 
etc.  In  1821  Hannon  died  insolvent,  and  the  rent  not  being  paid, 
Moore  "took  possession"  of  the  house  again,  though  in  what  mode 
or  whether  with  any  of  the  requisites  of  a  common  law  re-entry  did 
not  appear. 


TURNER  V.  SMITH.  523 

In  1825,  being  still  in  possession,  he  conveyed  the  rent  charge, 
describing  it  in  form,  to  one  Irwin,  and  Irwin  in  1854  conveyed 
it,  with  the  lot  on  which  it  was  charged  to  R.  M.  and  J.  M.  Smith; 
Irwin  and  Smith,  each  respectively,  being  in  possession  of  the 
house  and  lot,  after  they  became  owners  of  the  rent,  as  Moore  had, 
himself,  been  after  Hannons  decease;  and  each  paying  the  taxes 
assessed  against  the  house  and  lot  while  he  held  it. 

In  May,  1861,  on  the  outbreak  of  the  rebellion,  Smith  abandoned 
his  residence  and  went  within  the  rebel  lines. 

On  the  5th  of  August  of  that  year  (12  Statutes  at  Large  294), 
Congress  passed  an  act  laying  a  "direct  tax  of  $20,000,000  annually 
upon  the  United  States,"  and  apportioning  the  same  in  a  manner 
which  is  set  forth,  among  the  several  States.*  The  act  provided 
particularly  for  assessing  and  collecting  of  the  tax,  directing  that 
it  should  be  collected  from  persons  at  their  dwellings,  in  the  first 
instance;  and  if  not  paid  should  be  obtained  by  distress  and  sale  of 
personal  property;  and  if  persons  could  not  be  found,  and  there 
was  no  personal  property,  then,  "by  public  sale  of  so  much  of  the 
said  property  as  shall  be  necessary  to  satisfy  the  taxes  due  thereon, 
together  with  an  addition  of  20  per  cent."  The  act  then  provided 
for  giving  a  deed,  but  did  not  in  any  part  declare  what  should  be 
the  effect  of  the  sale  or  deed,  or  that  it  should  divest  liens  of  any 
kind. 

The<  act  authorized  each  State  to  assume,  assess,  collect,  and  pay 
its  quota  of  the  tax;  and  the  loyal  States  did  do  this.  In  the  rebel 
States  nothing  could  be  done. 

On  the  7th  of  June,  1862  (Ib.  423),  Congress  passed  another  act, 
entitled  "An  Act  for  the  Collection  of  Direct  Taxes  in  Insurrec- 
tionary Districts,  &c." 

On  the  6th  of  February,  1863  (12  Stat.  at  Large,  640),  Congress 
passed  a  short  "act  to  amend"  this  act,  and  entitled  "An  Act  for 
the  Collection  of  Direct  Taxes  in  Insurrectionary  Districts,  &c." 

With  these  statutes  on  the  statute-book,  and  the  property  in  Alex- 
andria, mentioned  at  the  beginning  of  this  statement,  being  assessed 
on  the  land-book  of  Virginia,  on  the  1st  of  March,  1864,  at  $3,500, 
the  tax  commissioners  of  the  United  States  (not  themselves  bidding 
at  all)  sold  it,  in  professed  pursuance  of  the  acts  of  Congress,  for 
$1,750  (less  than  two-thirds,  $2,333,  of  its  assessed  value)  to  one 
Turner,  describing  it  as  a  house  on  Royal  Street,  between  King  and 
Prince  Streets,  at  Alexandria,  in  the  State  of  Virginia,  "said  to  have 


524  SALE  OF  LAND  FOE  UNPAID  TAXES. 

belonged  to  R.  M.  and  J .  M.  Smith"  and  charged  to  them  on  the 
land-book  of  the  State  aforesaid  for  the  year  1860. 

The  rebellion  being  suppressed  the  Smiths — never  having  offered  as 
"holders  of  a  valid  lien"  or  otherwise  to  redeem — brought  suit  in 
proper  form  against  Turner  to  recover  certain  arrears  of  the  ground- 
rent.  Turner  claimed  title  to  the  lot  free  of  rent  under  the  sale 
for  taxes  made  by  authority  of  the  several  acts  of  Congress  already 
mentioned  for  imposing  and  collecting  a  direct  tax.  The  decis- 
ion of  the  court  where  the  suit  was  brought  was  against  the  title 
thus  set  up,  that  is  to  say,  it  was  in  favor  of  the  Smiths,  and  their 
rent,  and  this  decision  being  affirmed  in  the  highest  court  of  the 
State  (18  Grattan  835)  the  case  was  here  for  review. 

Mr.  Justice  MILLER  delivered  the  opinion  of  the  court. 

Two  propositions  are  relied  on  to  defeat  the  title  under  the  sale  for 
taxes. 

2.  That  the  plaintiffs  below  in  whose  favor  the  judgment  was 
rendered,  were  the  owners  of  a  rent  charge  on  the  land,  which  was 
not  extinguished  by  the  sale  for  the  unpaid  taxes. 

2.  In  the  act  of  August  5,  1861,  apportioning  the  tax  of  $20,000,- 
<)00  among  the  States,  according  to  population,  provision  is  made  for 
its  collection  out  of  the  lands  within  those  States,  if  not  paid  by 
the  States.  Under  the  provisions  of  that  act  it  might  admit  of  some 
doubt  whether  the  tax  was  in  its  essence  a  tax  on  the  land,  and  on 
all  the  various  estates  in  which  the  fee  may  have  been  divided,  or 
was  a  tax  on  the  owner  of  the  land,  and  levied  on  the  interest  of 
the  owner  in  it,  and  on  no  other  subordinate  or  incorporeal  interest. 
But  no  tax  was  ever  collected,  or  any  land  sold  under  that  act.  The 
States  which,  in  the  war  for  the  support  of  which  this  tax  was  levied 
supported  the  General  Government,  assumed  and  paid  the  portion 
allotted  to  each.  With  regard  to  the  States  which  were  in  insur- 
rection, Congress  passed  a  new  law  for  the  assessment  and  collec- 
tion of  their  portion,  under  which  the  sale  in  this  case  was  made. 
That  act,  the  statute  of  1862,  to  which  we  have  already  referred, 
directed  the  commissioners  to  whom  the  collection  of  the  tax  was 
intrusted,  to  take  the  last  assessment  of  the  value  of  the  lands  made 
in  each  State  for  State  taxation  as  the  basis  on  which  the  tax 
•charged  to  that  State  by  the  act  of  1861  should  be  apportioned 
among  the  several  lots  and  parcels  within  that  State,  and  a  penalty 
of  fifty  per  cent  was  added  in  each  case  for  non-payment.  The 
President  was  directed  to  declare  by  his  proclamation  what  States 


TURNER  V.  SMITH.  525 

or  parts  of  States  were  in  insurrection,  and  "thereupon  the  said 
several  lots  or  parcels  of  land  became  charged  respectively  with 
their  respective  portions  of  said  direct  tax,  and  the  same,  together 
with  the  penalty,  became  a  lien  thereon,  without  any  further  pro- 
ceedings whatever."  Section  three  gave  a  time  in  which  this  tax 
might  be  paid,  and  section  four  proceeds  to  say  that  "the  title  of,  in 
and  to  each  and  every  parcel  of  land  upon  which  said  tax  has  not 
been  paid  as  above  provided,  shall  thereupon  become  forfeited  to  the 
United  States,  and  upon  the  sale  hereinafter  provided  for  shall  vest 
in  the  United  States,  or  in  the  purchaser  at  such  sale,  in  fee  simple, 
free  and  discharged  from  all  liens,  incumbrances,  right,  title,  and 
claims  whatsoever." 

There  is  nothing  in  the  statute  which  requires  the  tax  commission- 
ers to  hunt  up  the  owner,  or  to  make  the  tax  out  of  personal  property 
of  his,  or  which  may  be  found  upon  the  land.  It  is  clearly  a 
direct  tax  on  the  land,  and  on  all  the  estates,  interests,  and  claims 
connected  with  or  growing  out  of  the  land.  All  this  was  forfeited 
to  the  United  States  on  non-payment  of  the  taxes,  and  passed  with 
the  sale  to  the  purchaser,  subject  alone  to  the  right  of  redemption, 
which  the  law  allowed.  In  that  respect  it  was  a  defeasible  title, 
but  in  all  other  respects  perfect,  complete  and  entire.  The  language 
of  the  statute  is  explicit  to  this  purport,  and  the  policy  and  neces- 
sity of  the  government,  which  could  not  look  after  the  fugitive  and 
hostile  owners,  required  such  a  tax,  and  such  a  mode  of  collecting  it. 

We  are  of  opinion,  therefore,  that  the  sale  being  a  valid  one  the 
rent  charge  of  the  defendant  in  error  was  cut  off  and  destroyed  by 
it. 

JUDGMENT  REVERSED,  and  the  cause  remanded  for  further  pro- 
ceedings IN  CONFORMITY  TO  THIS  OPINION. 

But  if  land  is  assessed  merely  to  a  resident  owner,  a  report  is  made  of 
his  delinquency  and  there  are  no  proceedings  in  rent;  what  is  sold  may  be 
the  interest  of  the  owner  only.  Dunn  v.  Winston,  31  Miss.  135. 


526  SALE  OF  LAND  FOE  UNPAID  TAXES. 


WILLIAMS  V.  PAYTON'S  LESSEE. 

Supreme  Court  of  the  United  States.     February    1819. 
4  Wheaton,  77. 

The  opinion  of  the  court  was  delivered  by  Mr.  Chief  Justice 
MARSHALL. 

This  is  an  ejectment  brought  in  the  Circuit  Court  for  the  district 
of  Kentucky,  by  the  original  patentee,  against  a  purchaser  at  a  sale 
made  for  non-payment  of  the  direct  tax,  imposed  by  the  act  of  Con- 
gress of  the  14th  of  July,  1793,  c.  92.  After  the  plaintiff  in  the  Cir- 
cuit Court  had  exhibited  iris  title,  the  defendant  gave  in  evidence 
the  books  of  the  supervisor  of  the  district,  showing,  that  the  tax 
on  the  lands  in  controversy  had  been  charged  to  the  plaintiffs,  and 
that  they  had  been  sold  for  the  non-payment  thereof.  They  also  gave 
in  evidence  a  deed  executed  by  the  Marshal  of  the  district,  in  pur- 
suance of  the  act  of  March  3d,  1804,  and  proved  by  Christopher 
Greenup,  the  agent  of  the  plaintiff,  that  there  were  tenants  on  the 
land,  and  that  he  did  not  pay  the  tax,  nor  redeem  the  land. 

Upon  this  evidence,  the  Court,  on  the  motion  of  the  plaintiff, 
instructed  the  jury,  "that  the  purchaser  under  the  sale  of  lands  for 
the  non-payment  of  the  direct  tax,  to  make  out  title,  must  show  that 
the  collector  had  advertised  the  land,  and  performed  the  other 
requisites  of  the  law  of  Congress,  in  that  case  provided,  otherwise  he 
made  out  no  title."  The  defendants  then  moved  the  Court  to 
instruct  the  jury  "that  the  deed  and  other  evidence  produced  by  them, 
and  herein  mentioned,  was  prima  facie  evidence  that  the  said  land 
had  been  advertised,  and  the  other  requisites  of  the  law  of  Congress, 
as  to  the  duty  of  the  collector,  in  that  respect,  had  been  complied 
with";  but  the  Court  refused  to  give  the  instruction;  and,  on  the 
contrary,  instructed  the  jury,  "that  said  deed,  and  other  evidence, 
was  not  prima  facie  evidence  that  the  said  land  had  been  advertised 
according  to  law,  nor  that  the  requisites  of  the  law  had  been  com- 
plied with." 

The  defendants  excepted  to  this  opinion.  The  jury  found  a  ver- 
dict for  the  plaintiff,  and  the  judgment  rendered  on  that  verdict  is 
now  before  this  Court  on  writ  of  error. 

As  the  collector  has  no  general  authority  to  sell  lands  at  his 
discretion  for  the  non-payment  of  the  direct  tax,  but  a  special  power 
to  sell  in  the  particular  cases  described  in  the  act,  those  cases  must 
exist,  or  his  power  does  not  arise.  It  is  a  naked  power,  not  coupled 
with  an  interest:  and  in  all  such  cases,  the  law  requires  that  every 

' 


WILLIAMS  V.  PAYTON'S  LESSEE.  527 

pre-requisite  to  the  exercise  of  that  power  must  precede  its  exercise-, 
that  the  agent  must  pursue  the  power,  or  his  act  will  not  be  sustained 
by  it. 

This  general  proposition  has  not  been  controverted;  but  the  plain- 
tiffs in  error  contend,  that  a  deed  executed  by  a  public  officer,  is 
prima  facie  evidence,  that  every  act  which  ought  to  precede  that 
deed  had  preceded  it.  That  this  conveyance  is  good,  unless  the  party 
contesting  it  can  show  that  the  officer  failed  to  perform  his  duty. 

It  is  a  general  principle,  that  the  party  who  sets  up  a  title  must 
furnish  the  evidence  necessary  to  support  it.  If  the  validity  of  a 
deed  depends  upon  an  act  in  pais,  the  party  claiming  under  that  deed 
is  as  much  bound  to  prove  the  performance  of  the  act,  as  he  would  be 
bound  to  prove  any  matter  of  record  on  which  its  validity  might  de- 
pend. It  forms  a  part  of  his  title;  it  is  a  link  in  the  chain  which 
is  essential  to  its  continuity,  and  which  it  is  incumbent  on  him  to 
preserve.  These  facts  should  be  examined  by  him  before  he  becomes  a 
purchaser,  and  the  evidence  of  them  should  be  preserved  as  a  neces- 
sary muniment  of  title.  If  this  be  true  in  general,  is  there 
anything  which  will  render  the  principle  inapplicable  to  the  case  of 
lands  sold  for  the  non-payment  of  taxes?  In  the  act  of  Congress, 
there  is  no  declaration  that  these  conveyances  shall  be  deemed  prima 
facie  evidence  of  the  validity  of  the  sale.  Is  the  nature  of  the 
transaction  such,  that  a  Court  ought  to  presume  in  its  favor  anything 
which  does  not  appear,  or  ought  to  relieve  the  party  claiming  under 
it  from  the  burthen  of  proving  its  correctness? 

The  duties  of  the  public  officer  are  prescribed  in  the  9th,  10th 
and  13th  sections  of  the  act  of  the  14th  of  July,  1798,  c.  92.  If  these 
duties  be  examined,  they  will  be  found  to  be  susceptible  of  complete 
proof  on  the  part  of  the  officer,  and  consequently  on  the  part  of  the 
purchaser,  who  ought  to  preserve  the  evidence  of  them,  at  least,  for 
a  reasonable  time.  Their  chief  object  is  to  give  full  notice  to  the  pro- 
prietor, and  furnish  him  with  every  facility  for  the  voluntary  pay- 
ment of  the  tax,  before  resort  should  be  had  to  coercive  means.  In 
some  instances  the  proprietor  would  find  it  extremely  difficult,  if 
not  impracticable,  to  prove  that  the  officer  had  neglected  to  give 
him  the  notice  required  by  law.  It  is  easy,  for  example,  to  show 
that  the  collector  has  posted  up  the  necessary  notifications  in  four 
public  places  in  his  collection  district,  as  is  required  by  the  9th  sec- 
tion, but  very  difficult  to  show  that  he  has  not.  He  may  readily 
prove  that  he  has  made  a  personal  demand  on  the  person  liable  for 
the  tax,  but  the  negative,  in  many  cases,  would  not  admit  of  proof. 

The  13th  section  permits  the  collector,  when  the  tax  shall  have 


528  SALE  OF  LAND  FOR  UNPAID  TAXES. 

remained  unpaid  for  the  term  of  one  year,  having  first  advertised  the 
same  for  two  months  in  six  different  puhlic  places  within  the  said 
district,  and  in  two  gazettes  in  the  State,  if  there  be  so  many,  one  of 
which  shall  be  the  gazette  in  which  the  laws  of  such  State  shall  be 
published  by  authority,  if  any  such  there  be,  to  proceed  to  sell,  &c. 

The  purchaser  ought  to  preserve  these  gazettes,  and  the  proof  that 
these  publications  were  made.  It  is  imposing  no  greater  hardship  on 
him  to  require  it,  than  it  is  to  require  him  to  prove,  that  a  power  of 
atttorney,  in  a  case  in  which  his  deed  has  been  executed  by  an  attor- 
ney, was  really  given  by  the  principal.  But  to  require  from  the 
original  proprietor  proof  that  these  acts  were  not  performed  by  the 
collector,  would  be  to  impose  on  him  a  task  always  difficult,  and  some- 
times impossible  to  be  performed. 

Although  this  question  may  not  have  been  expressly,  and  in  terms 
decided  in  this  Court,  yet  decisions  have  been  made  which  seem  to 
recognize  it.  In  the  case  of  Stead's  Executors  v.  Course  (4  Cranch 
403),  in  which  was  drawn  into  question  the  validity  of  a  sale  made 
under  the  tax  laws  of  the  State  of  Georgia,  this  Court  said,  "it  is 
incumbent  on  the  vendee  to  prove  the  authority  to  sell."  And  in 
Parker  v.  Rule's  Lessee  (9  Cranch  64),  where  a  sale  was  declared  to 
be  invalid,  because  it  did  not  appear  in  evidence,  that  the  publica- 
tions required  by  'the  9th  section  of  the  act,  had  been  made,  the 
Court  inferred,  that  they  had  not  been  made,  and  considered  the  case 
as  if  proof  of  the  negative  had  been  given  by  the  plaintiff  in  eject- 
ment. The  question,  whether  the  deed  was  prima  facie  evidence 
it  is  true,  was  not  made  in  that  case ;  but  its  existence  was  too  obvious 
to  have  escaped  either  the  Court  or  the  bar.  It  was  not  made  at 
the  bar,  because  counsel  did  not  rely  on  it,  nor  noticed  by  the 
judges,  because  it  was  not  supposed  to  create  any  real  difficulty. 

It  has  been  said  in  argument,  that  in  cases  of  sales  under  the  tax 
laws  of  Kentucky,  a  deed  is  considered  by  the  Courts  of  that  State, 
as  prima  facie  evidence  that  the  sale  was  legal.  Not  having  seen  the 
case  or  the  law,  the  Court  can  form  no  opinion  on  it.  In  construing 
a  statute  of  Kentucky,  the  decisions  of  the  Courts  of  Kentucky  would 
unquestionably  give  the  rule  by  which  this  Court  would  be  guided; 
but  it  is  the  peculiar  province  of  this  Court  to  expound  the  acts  of 
Congress,  and  to  give  the  rule  by  which  they  are  to  be  construed. 

Judgment  affirmed  with  costs. 

As  to  the  conclusiveness  of  tax  deeds  see  McCready  v.  Sexton,  29  Iowa 
356,  supra. 


CHAPTER  XIIL 
TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

I.     POLICE  AND  TAXING  POWER., 
YOUNGBLOOD  V.  SEXTON. 

Supreme  Court  of  Michigan.     October,  1875. 
32  Michigan,  406. 

COOLEY,  J.  The  bill  in  this  cause  was  filed  to  restrain  the  col- 
lection from  the  several  complainants  of  a  tax  assessed  against  them 
separately,  in  respect  to  the  business  in  which  each  is  engaged. 

5.  The  objection  which  appears  to  be  principally  relied  upon  is, 
that  a  tax  on  the  traffic  in  liquors  under  this  law  is  equivalent  to  a 
license  of  the  traffic,  and  therefore  conies  directly  in  conflict  with 
that  provision  of  the  constitution  which  declares  that  "the  legis- 
lature shall  not  pass  any  act  authorizing  the  grant  of  license  for  the 
sale  of  ardent  spirits  or  other  intoxicating  liquors."  Const.,  Art.  IV., 
Sec.  47. 

Does,  then,  a  tax  upon  the  traffic  in  liquors  come  within  the 
condemnation  of  this  provision  of  the  constitution,  as  being  equiva- 
lent to  a  license  of  the  traffic  ?  Is  it  the  same  in  legal  effect,  or  is  it 
the  same  according  to  the  popular  understanding  of  the  term  license  ? 
This  is  the  question  that  presents  itself  for  decision  on  this  branch 
of  the  case. 

The  popular  understanding  of  the  word  license  undoubtedly  is,  a 
permission  to  do  something  which  without  the  license  would  not  be 
allowable.  This  we  are  to  suppose  was  the  sense  in  which  it  was 
made  use  of  in  the  constitution.  But  this  is  also  the  legal  mean- 
ing. "The  object  of  a  license,"  says  Mr.  Justice  Manning,  "is  to 
confer  a  right  that  does  not  exist  without  a  license."  Chilvers  v. 
People,  11  Mich.  43,  49.  Within  this  definition,  a  mere  tax  upon 
the  traffic  cannot  be  a  license  of  the  traffic,  unless  the  tax  confers 
some  right  to  carry  on  the  traffic  which  otherwise  would  not  have 
existed.  We  do  not  understand  that  such  is  the  case  here.  The 
34  529 


530        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

very  act  which  imposed  this  tax  repealed  the  previous  law,  which 
forbade  the  traffic  and  declared  it  illegal.  The  trade  then  became 
lawful,  whether  taxed  or  not ;  and  this  law,  in  imposing  the  tax,  did 
not  declare  the  trade  illegal  in  case  the  tax  was  not  paid. 

So  far  as  we  can  perceive,  a  failure  to  pay  the  tax  no  more  ren- 
ders the  trade  illegal  than  would  a  like  failure  of  a  farmer  to  pay 
the  tax  on  his  farm  render  its  cultivation  illegal.  The  State  has 
imposed  the  tax  in  each  case,  and  made  such  provision  as  has  been 
deemed  needful  to  insure  its  payment;  but  it  has  not  seen  fit  to  make 
the  failure  to  pay  a  forfeiture  of  the  right  to  pursue  the  calling.  If 
the  tax  is  paid,  the  traffic  is  lawful;  but  if  not  paid,  the  traffic  is 
equally  lawful.  There  is  consequently  nothing  in  the  case  that 
appears  to  be  in  the  nature  of  a  license.  The  state  has  provided 
for  the  taxation  of  a  business  which  was  found  in  existence,  and  the 
carrying  on  of  which  it  no  longer  prohibits;  and  that  is  all. 

But  it  is  urged  that  by  taxing  the  business  the  state  recognizes  its 
lawful  character,  sanctions  its  existence,  and  participates  in  its 
profits — all  of  which  is  within  the  real  intent  of  the  prohibition  of 
license.  The  lawfulness  of  the  business,  if  by  that  we  understand 
merely  that  it  is  no  longer  punishable,  and  is  capable  of  constituting 
the  basis  of  contracts,  was  undoubtedly  recognized  when  the  prohibi- 
tory law.  was  repealed ;  but  as  the  illegality  of  the  traffic  depended  on 
that  law,  so  its  lawfulness  now  depends  upon  its  repeal;  the  tax  has 
nothing  to  do  with  it  whatever. 

Now  it  is  not  claimed,  so  far  as  we  are  aware,  that  the  repeal  of 
the  prohibitory  law  was  incompetent;  and  if  not,  the  mere  recogni- 
tion of  the  lawfulness  of  the  traffic  cannot  make  the  tax  or  any 
other  law  invalid.  It  is  only  the  recognition  of  an  existing  and  a 
conceded  fact,  and  the  courts  cannot,  if  they  would,  refuse  to  recog- 
nize it. 

The  idea  that  the  state  lends  its  countenance  to  any  particular 
traffic  by  taxing  it,  seems  to  us  to  rest  upon  a  very  transparent 
fallacy.  It  certainly  overlooks  or  disregards  some  ideas  that  must 
always  underlie  taxation.  Taxes  are  not  favors;  they  are  burdens; 
they  are  necessary,  it  is  true,  to  the  existence  of  government,  but 
they  are  not  the  less  burdens,  and  are  only  submitted  to  because  of 
the  necessity.  It  is  deemed  advisable  to  make  careful  provision  to 
preclude  these  burdens  becoming  needlessly  oppressive;  but  it  is 
conceded  by  all  the  authorities,  that  under  some  circumstances  they 
may  be  carried  to  an  extent  that  will  be  ruinous  to  individuals.  It 
would  be  a  remarkable  proposition,  under  such  circumstances,  that  a 
thing1  is  sanctioned  and  countenanced  by  the  government  when  this 


YOUNGBLOOD  V.  SEXTON.  531 

burden,  which  may  prove  disastrous,  is  imposed  upon  it,  while,  on  the 
other  hand,  it  is  frowned  upon  and  condemned  when  the  burden  is 
withheld.  .  .  .  And  the  taxation  of  a  thing  may  be,  and  often 
is  when  police  purposes  are  had  in  view,  a  means  of  expressing  dis- 
approval instead  of  approbation  of  what  is  taxed. 

There  has  undoubtedly  been  felt  and  expressed  a  strong  senti- 
mental objection  to  the  doing  of  anything  by  the  state  that  even 
seemed  to  be  a  lending  of  its  countenance  to  a  business  which  the 
objectors  regarded  as  an  evil  in  itself;  especially  to  the  state  par- 
ticipating in  the  profits  of  a  pernicious  trade.  But  the  objection  never 
found  expression  in  laws  forbidding  the  taxation  of  liquors  or  of  the 
business  of  dealing  in  them.  Indeed,  in  this  state  liquors  have  always 
been  taxable  as  property;  and  so  have  been  the  implements  by  means 
of  which  forbidden  games  of  chance  have  been  carried  on.  Yet  when 
the  keeper  of  billiard  tables  is  compelled  to  pay  a  tax,  it  can  be  no 
defense  to  him,  either  in  law  or  in  morals,  that  he  is  compelled  to  do 
so  from  the  profits  of  an  illegal  business.  To  refuse  to  receive  the 
tax  under  such  circumstances  would  tend  to  encourage  the  business, 
instead  of  restraining  it;  and  would  not  only  be  unwise  because  of 
exempting  one  man  from  his  fair  share  of  taxation,  but  also  because 
it  would  tend  to  defeat  the  state  policy  which  forbids  games  of 
chance  and  hazard.  The  idea  that  a  thing  is  favored  because  it  is 
taxed  may  be  examined  in  the  light  of  the  practice  of  this  state  in 
some  other  particulars.  It  has  always  been  the  custom  in  apportion- 
ing taxes  by  valuation  to  make  some  discrimination  based  on  rea- 
sons of  public  policy.  As  an  illustration  we  may  mention  the  case  of 
property  devoted  to  educational  or  charitable  purposes,  and  which  as 
a  rule  has  been  exempted  from  the  general  taxation.  The  general 
belief  has  been,  that  the  interests  and  welfare  of  the  whole  community 
would  be  best  subserved  by  abstaining  from  any  imposition  of  the 
burdens  of  government  upon  such  property;  and  the  legislature  in 
apportioning  the  taxes  has  accepted  this  general  belief  and  acted 
upon  it.  ...  While  in  the  selection  of  subjects  for  taxation, 
revenue  is  to  be  considered  and  kept  in  view,  it  is  impossible  to 
exclude  other  considerations.  In  proposing  a  tax  it  might  always  be 
a  question  whether  it  should  be  imposed  upon  persons,  or  upon 
property  by  value,  and  if  so,  upon  what  property,  or  upon  business; 
and  if  so,  what  kind  of  business,  or  whether  it  should  not  be  a 
combination  of  all  these.  One  method  might  be  the  easiest  for  the 
collection  of  the  necessary  revenue,  but  most  injurious  or  unequal  in 
its  result;  one  might  discourage  industry  and  another  encourage  it; 
one  might  collect  the  tax  from  luxuries,  and  therefore  fall  mainly 


532       TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

upon  the  rich,  while  another  would  collect  it  from  necessaries  and 
be  oppressive  to  the  poor.  The  whole  question  would  be  quite  as  much 
one  of  policy  as  of  necessity,  and  a  legislator  would  be  unfit  for  his 
office  who  did  not  look  beyond  the  proposed  tax  to  its  probable  results. 
This  is  especially  true  in  every  case  where  the  tax  has  reference  to 
police  as  well  as  revenue.  A  particular  business  may  then  be  taxed 
while  others  are  spared,  not  only  because  for  any  reason  it  can  best 
bear  the  burden,  but  also  because  such  surroundings  attach  them- 
selves to  the  business  taxed  as  to  render  the  discouragement  and 
discipline  of  heavy  taxation  wise  and  politic.  In  the  few  cases  in 
which  the  right  to  do  this  has  been  denied  on  the  ground  of  inequality, 
the  courts  have  affirmed  it  as  being  beyond  question.  See  Durach's 
appeal,  62  Penn.  St.  491,  494;  Fletcher  v.  Oliver,  25  Ark.  289;  State 
ir.  Parker,  32  N.  J.  426,  431.  The  federal  government  has  gone  to  a 
great  extent  in  the  same  direction,  levying  duties  in  some  cases  which 
in  their  results  are  prohibitory;  and  in  the  case  of  the  state  banks 
purposely  taxing  them  out  of  existence.  Veazie  Bank  v.  Fenno,  8 
Wall.  533.  This  case  does  not  call  for  any  expression  of  opinion  upon 
legislation  of  that  extreme  character,  for  we  have  nothing  in  this  law 
that  goes  beyond  the  ordinary  legislation  when  it  is  enacted  for  the 
double  purpose  of  revenue  and  regulation. 

This  state  has  never  shown  any  disinclination  to  make  things 
morally  and  legally  wrong  contribute  to  the  public  revenue  when 
justice  and  good  morals  seemed  to  require  it.  If  it  were  to  act  upon 
the  idea  of  refusing  to  derive  a  revenue  from  such  sources,  it  ought  to 
decline  to  receive  fines  for  criminal  offenses  with  the  same  emphasis 
that  it  would  refuse  to  collect  a  tax  from  an  obnoxious  business.  If 
the  tax  is  laid  by  way  of  discouragement  or  regulation,  it  has  the 
same  general  object  in  view  with  the  fine;  not  only  as  it  effects  the 
person  taxed  and  the  community,  but  also  in  the  use  to  which  the 
money  is  devoted.  Yet  the  constitution  expressly  provides  for  a 
library  fund  to  be  derived  from  the  violations  of  the  public  law 
(Constitution,  Art.  X1I1.,  Sec.  12),  a  provision  that  may  as  legiti- 
mately be  said  to  be  a  license  of  crime,  as  a  tax  on  traffic  may  be 
said  to»  be  a  license  of  the  traffic. 

Taxes  upon  business  are  usually*  collected  in  the  form  of  license 
fees;  and  this  may  possibly  have  lead  to  the  idea  that  seems  to  have 
prevailed  in  some  quarters,  that  a  tax  implied  a  license.  But  there 
is  no  necessary  connection  whatever  between  them. 

A  business  may  be  licensed  and  yet  not  taxed,  or  it  may  be  taxed 
and  yet  not  licensed.  And  so  far  is  the  tax  from  necessarily  being  a 
license,  that  provision  is  freauently  made  by  law  for  the  taxation  of 


YOUNG  BLOOD  V.  SEXTON.  533 

a  business  that  is  carried  on  under  a  license  existing  independent  of 
the  tax. 

Such  is  the  case  where  cities,  under  proper  legislative  authority,  tax 
occupations  which  are  carried  on  under  licenses  from  the  state, — Ould 
v.  Richmond,  23  Grat.,  464;  Napier  v.  Hodges,  31  Texas,  287;  Cutli- 
bert  v.  Conly,  32  Geo.,  211 ;  Wendover  v.  Lexington,  15  B.  Monr.,  258 ; 
see  also  Home  Ins.  Co.  v.  Augusta,  50  Geo.,  530.  The  license  confers 
a  privilege,  but  it  is  not  perceived  why  a  privilege  thus  conferred 
should  not  be  taxed  as  much  as  any  other.  The  federal  laws  give  us 
illustration  of  the  taxation  of  illegal  traffic.  A  case  in  point  was  that 
of  the  taxation  of  the  liquor  traffic  in  this  state  previous  to  the  repeal 
of  the  prohibitory  law;  the  federal  law  found  a  business  in  existence 
and  it  taxed  it  without  undertaking  to  give  it  any  protection  whatever. 
McGuire  v.  Com.  3  Wall,  387 ;  Pervear  v.  Com.,  5  Wall.,  475.  What 
would  have  prevented'  the  state  from  taxing  the  same  traffic  at  the 
same  time?  Is  it  any  more  restricted  in  the  selection  of  subjects  of 
taxation  than  the  general  government  is?  If  one  may  tax  and  at  the 
same  time  refuse  to  protect  may  not  the  other  do  the  same  ?  The  only 
reason  suggested  for  a  negative  reply  to  these  questions  is,  that  it 
wa?  the  state  itself,  not  the  United  States,  that  made  the  business 
illegal,  and  it  would  be  inconsistent  and  absurd  to  declare  it  illegal 
and  at  the  same  time  tax  it.  But  how  the  inconsistency  would  appear 
in  one  case  rather  than  the  other  is  not  apparent.  The  illegality  was 
declared  by  competent  authority,  and  yet  the  federal  government 
taxed  the  trade,  at  the  same  time  refusing,  or  being  unable  to  protect 
it.  If  protection  because  of  the  tax  was  due  to  the  very  thing  upon 
which  the  tax  was  imposed,  there  would  be  an  inconsistency  in  taxing 
a  prohibited  trade;  but  treating  taxation,  however  and  wherever  it 
may  fall,  as  the  return  for  the  general  benefits  of  government, — for 
the  protection  of  the  life,  liberty,  the  social  and  family  relations,  as 
well  as  to  business  and  property, — which  is  the  only  legal  and  proper 
idea  of  taxation,  there  is  no  inconsistency  whatever  in  making  a  thing 
which  is  not  protected  one  of  the  measures  or  standards  by  which  to 
determine  how  much  the  party  owning  or  supporting  it  ought  to  pay 
the  government.  If  one  puts  the  government  to  special  inconvenience 
and  cost  by  keeping  up  a  prohibited  traffic  or  maintaining  a  nuisance, 
the  fact  is  a  reason  for  discriminating  in  taxation  against  him;  and 
if  the  tax  i?  imposed  on  the  thing  which  is  prohibited,  or  which  con- 
stitutes the  nuisance,  the  tax  law,  instead  of  being  inconsistent  with 
the  law  declaring  the  illegality,  is  in  entire  harmony  with  its  general 
purpose  and  may  sometimes  be  even  more  effectual.  Certainly,  what- 
ever discriminations  are  made  in  taxation  ought  to  be  in  the  direction 


534        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

of  making  the  heaviest  burdens  fall  upon  those  things  which  are  ob- 
noxious to  the  public  interests,  wherever  that  is  practicable. 

For  these  reasons  we  think  the  objections  which  have  been  made 
to  the  law  have  no  validity. 

The  decree  of  the  superior  court  dismissing  the  bill  will  be  affirmed, 
with  costs. 

The  other  Justices  concurred. 


II.    WHAT  is  A  PRIVILEGE? 
PORTLAND  BANK  V.  APTHORP. 

Supreme  Judicial  Court  of  Massachusetts,  May,  1815. 
12  Massachusetts,  252. 

PARKER,  C.  J.  This  cause  was  argued  altogether  upon  the  question, 
whether  the  act  of  the  legislature,  passed  June,  1812,  exacting  one 
per  cent,  per  annum  upon  the  capital  of  all  banks,  which  should  be  in 
operation  after  the  first  day  of  the  then  ensuing  October,  could  legally 
and  constitutionally  be  applied  to  those  banks,  (of  which  the  Portland 
bank  is  one)  whose  charters  existed  prior -to  the  passing  of  that  act. 

The  words  of  the  constitution,  from  which  the  authority  of  the 
legislature  to  impose  taxes  and  to  obtain  a  revenue  is  derived,  are — 
"to  impose  and  levy  proportionate  and  reasonable  assessments,  rates 
and  taxes  upon  all  the  inhabitants  of,  and  persons  resident,  and  estates 
lying  within  the  commonwealth;  and  also  to  impose  and  levy  reason- 
able duties  and  excises,  upon  any  produce,  goods,  wares  and  mer- 
chandise and  commodities  whatsoever,  brought  into,  produced,  manu- 
factured or  being  within  the  same." 

Under  the  first  branch  of  this  power  viz.  that  of  imposing  and 
levying  rates  and  taxes,  the  requisition  upon  the  banks  cannot  be 
justified;  for  those  taxes  must  be  proportional  upon  all  the  inhabi- 
tants of,  persons  resident,  and  estates  lying,  within  the  common- 
wealth. The  exercise  of  this  power  requires  an  estimate  or  valuation 
of  all  the  property  in  the  commonwealth;  and  then  an  assessment 
upon  each  individual,  according  to  his  proportion  of  that  property. 
To  select  any  individual  or  company,  or  any  specific  article  of  prop- 
erty, and  assess  them  by  themselves,  would  be  a  violation  of  this  pro- 
vision of  the  constitution. 

But  there  are  other  sources  of  emolument  and  profit,  not  strictly 


PORTLAND  BANK  V.  APT110RP.  535 

called  property,  but  which  are  rather  to  be  considered  as  the  means 
of  acquiring  property;  from  which  a  reasonable  revenue  may  be  ex- 
acted by  the  legislature,  within  the  fair  meaning  of  the  other  branches 
of  the  power  above  recited.  The  exercise  of  this  power  is  called  the 
imposing  or  levying  of  duties  and  excises;  and  the  subjects  upon 
which  they  are  to  be  levied  are  produce,  goods,  wares,  merchandise 
and  commodities,  brought  into,  produced,  manufactured,  or  being 
within  the  state.  The  former  provision  seems  to  be  intended  as  a 
contribution  of  the  individual  citizens,  in  proportion  to  the  property, 
whether  real  or  personal,  which  they  are  respectively  worth.  The 
latter  is  a  tax  upon  the  articles,  whoever  may  be  the  owner,  or  into 
whose  hands  soever  they  may  go;  operating  as  compensation  for  the 
privilege  of  producing,  manufacturing  or  bringing  them  within  the 
state;  and  the  sum  which  each  individual  may  pay  of  this  latter 
species  of  taxes,  may  not  be  in  proportion  to  his  property ;  but  will  be 
only  in  proportion  to  the  quantity  of  such  particular  article  so  taxed, 
as  may  be  consumed  by  him,  or  used  by  him  in  the  way  of  his  busi- 
ness and  employment. 

The  term  excise  is  of  very  general  signification,  meaning  tribute, 
custom,  tax,  tollage  or  assessment.  It  is  limited,  in  our  constitution, 
as  to  its  operation,  to  produce,  goods,  wares,  merchandise  and  com- 
modities. This  last  word  will  perhaps  embrace  everything,  which 
may  be  a  subject  of  taxation,  and  has  been  applied  by  our  legislature, 
from  the  earliest  practice  under  the  constitution,  to  the  privilege  of 
using  particular  branches  of  business  or  employment,  as  the  business 
of  an  auctioneer,  of  an  attorney,  of  a  tavern  keeper,  of  a  retailer  of 
spirituous  liquors,  &c.  It  must  have  been  under  this  general  term 
commodity,  which  signifies  convenience,  privilege,  profit  and  gains,  as 
well  as  goods  and  wares,  which  are  only  its  vulgar  signification,  that 
the  legislature  assumed  the  right  which  has  been  uniformly  and  with- 
out complaint  exercised  for  thirty  years,  of  exacting  a  sum  of  money 
from  attorneys,  and  barristers  at  law,  vendue  masters,  tavern  keepers 
and  retailers.  For  every  man  has  a  natural  right  to  exercise  either  of 
these  employments  free  of  tribute,  as  much  as  a  husbandman  or 
mechanick  has  to  use  his  particular  calling.  The  money  required  of 
them  is  not  a  proportional  tax;  nor  is  it  an  excise  or  duty  upon 
produce,  goods,  wares  or  merchandise.  It  is  a  commodity,  conve- 
nience or  privilege,  which  the  legislature  has,  by  cotemporaneous 
construction  of  the  constitution,  assumed  a  right  to  sell  at  a  reason- 
able price ;  and  by  parity  of  reason  it  may  impose  the  same  conditions 
upon  every  other  employment  or  handicraft. 


530        TAXATION  OF  BUSINESS  AND  PKIVILEGE. 

According  to  the  construction  of  the  constitution,  there  can  be  no 
doubt  that  the  legislature  might  as  well  exact  a  fee  or  tribute  from 
brokers,  factors  or  commission  merchants,  for  the  privilege  of  trans- 
acting their  business,  as  from  auctioneers,  or  innholders,  or  retailers, 
or  attornies.  It  will  undoubtedly  be  the  policy  of  a  wise  legislature 
not  to  multiply  burthens  of  this  sort;  but  we  speak  only  of  their 
power,  presuming  that  it  will  never  be  exercised  but  for  wise  or 
necessary  purposes. 

If  it  should  be  true  that  this  right  exists  with  respect  to  individ- 
uals, then  the  only  remaining  question  is,  whether  when  a  number  OL 
individuals  have  associated  for  the  purpose  of  carrying  on  the  business 
of  brokerage,  money  lending  or  factorage  more  conveniently,  exten- 
sively and  securely,  and  for  that  purpose  have  obtained  a  license  or 
charter  from  the  government,  they  are  exempt  from  a  liability,  which 
would  attach  to  them  severally  as  individuals.  Did  the  legislature, 
when  it  incorporated  the  plaintiffs,  relinquish  the  right  of  laying  an 
excise  or  duty  upon  the  business  which  they  should  transact  during 
the  continuance  of  the  charter  of  incorporation?  There  is  no  express 
•waiver  or  relinquishment,  nor  is  there  any  strong  implication  of  one. 
The  object  of  their  charter  is  to  enable  them  in  a  body,  to  conduct 
their  business  as  an  individual,  to  make  contracts  and  to  enforce  them 
as  such,  avoiding  the  inconveniences  of  a  copartnership.  This  is  all 
that  is  asked  for  by  the  company,  and  all  that  is  given  by  the  charter. 
It  is  a  privilege  to  manage  their  business,  and  not  an  exemption  from 
duty. 

Suppose  that  heretofore  the  legislature  should  have  enacted,  that 
no  person  should  keep  a  publick  house,  or  retail  spirituous  liquors, 
without  a  license  from  some  authority  by  them  designated;  but  with- 
out exacting  any  tax  or  duty  therefor:  could  it  be  contended  that 
afterwards  they  were  precluded  from  establishing  a  tax  or  excise 
upon  the  business  thus  permitted  to  be  exercised  ? 

Every  man  has  the  implied  permission  of  the  government  to  carry 
on  any  lawful  business;  and  there  is  no  difference  in  the  right,  be- 
tween those  which  require  a  license  and  those  which  do  not,  except 
in  the  prohibition,  either  express  or  implied,  where  a  license  is  re- 
quired. So  that  to  lay  a  duty  or  excise  upon  branches  of  business, 
which  exist  by  license,  is  no  infringement  of  any  privilege  conveyed 
by  such  license. 

Taxes  of  this  sort  must  undoubtedly  be  equal;  that  is,  they  must 
operate  upon  all  persons,  who  exercise  the  employment  which  is  so 
taxed.  A  tax  upon  one  particular  moneied  capital  would  unquestion- 


STATE    V.  SCHLIER.  537 

ably  be  contrary  to  the  principles  of  justice,  and  could  not  be  sup- 
ported; but  a  tax  upon  all  banks  we  think  justifiable  upon  the  grounds 
we  have  stated. 

Plaintiffs  nonsuit. 


STATE  V.  SCHLJER. 

Supreme  Court  of  Tennessee,  October,  1871. 
3  Heiskell  281. 

NICHOLSON,  C.  J.,  delivered  the  opinion  of  the  Court. 

Defendant  was  presented  at  the  September  Term,  1870,  of  the 
Knox  County  Criminal  Court,  for  having  a  gallery  for  taking  pho- 
tographs, ambrotypes,  and  other  likenesses,  without  paying  the  privi- 
lege tax  and  taking  out  a  license,  contrary  to  the  Act  of  February 
24th,  1870,  ch.  71,  sec.  1.  The  Circuit  Judge  sustained  a  demurrer 
to  the  indictment,  upon  the  ground  that  the  Act  of  the  Assembly 
imposing  the  tax  was  unconstitutional,  and  quashed  the  same.  From 
this  judgment  the  State  has  appealed. 

The  Constitution  of  1834  contained  the  same  language,  as  to  the 
taxation  of  "privileges,"  that  is  found  in  the  Constitution  of  1870. 
It  is  as  follows :  "But  the  Legislature  shall  have  power  to  tax  mer- 
chants, pedlars,  and  privileges,  in  such  manner  as  they  may  from 
time  to  time,  direct."  This  language  had  been  judicially  interpreted 
in  several  cases,  prior  to  the  adoption  of  the  Constitution  of  1870. 
In  the-  case  of  the  Mayor  and  Alderman  of  Columbia  v.  Guest,  the 
Court  said:  "We  have  defined  it  in  several  cases,  to  be  the  exercise 
of  an  occupation,  or  business,  which  requires  a  license  from  some 
proper  authority,  designated  by  a  general  law,  and  not  open  to  all, 
or  any  one,  without  such  license":  4  Sneed.  193;  5  Sneed,  258. 

Such  was  the  fixed  judicial  interpretation  of  the  word  "privileges," 
when  the  Convention  of  1870  adopted  exactly  the  same  language,  in 
forming  the  present  Constitution.  It  was  adopted  with  a  full  knowl- 
edge of  the  meaning  which  had  been  attached  to  it  by  the  courts. 
This  is  conclusive  as  to  the  present  interpretation  to  be  placed  on  it. 

The  Act  of  February  24th,  1870,  c.  24,  sec.  1,  is  as  follows  : 

"From  and  after  the  passage  of  this  Act,  artists  taking  photo- 
graphs, ambrotypes,  or  any  other  likenesses,  shall  take  out  a  license 
semi-annually,  and  pay  a  privilege  tax  therefor,  as  follows:  For 
each  and  every  gallery  located  in  a  city  of  over  three  thousand  inhabi- 
tants, thirty-five  dollars :  for  each  and  every  gallery  located  in  a 


538        TAXATION  OF  BUSINESS  AND  PKIVILEGE. 

town  of  from  five  hundred  to  three  thousand  inhabitants,  twenty 
dollars;  for  each  and  every  gallery  located  in  a  town  of  less  than 
five  hundred,  inhabitants,  or  in  the  country,  five  dollars.  Said  tax 
to  be  paid  to  the  Clerk  of  the  County  Court  of  the  county  in  which 
the  gallery *  may  be  located." 

This  act  constituted  the  occupation  or  business  of  taking  photo- 
graphs, ambrotypes,  and  other  likenesses,  a  privilege,  according  to  the 
established  definition  of  that  term.  Under  the  power  "to  tax  privi- 
leges in  such  manner  as  the  Legislature  may  from  time  to  time, 
direct,"  this  Act  is  constitutional,  unless  it  is  in  conflict  with  Art.  11, 
Sec.  8,  of  the  Constitution.  This  section  is  as  follows: 

"The  Legislature  shall  have  no  power  to  suspend  any  general  law 
for  the  benefit  of  any  particular  individual,  nor  to  pass  any  law  for 
the  benefit  of  individuals,  inconsistent  with  the  general  laws  of  the 
land;  nor  to  pass  any  law  granting  to  any  individual  or  individuals 
rights,  privileges,  immunities  or  exemptions,  other  than  such  as 
may  be,  by  the  same  law,  extended  to  any  member  of  the  community 
who  may  be  able  to  bring  himself  within  the  provisions  of  such  law." 

By  the  plain  and  express  language  of  Art.  2,  Sec.  28,  the  Legisla- 
ture has  the  power  to  exercise  its  discretion  as  to  the  mode  of  taxing 
privileges.  If  there  is  a  conflict  between  this  section  and  Sec.  8  of 
Art.  11,  it  is  our  duty  so  to  construe  them  as  to  make  both  sections 
operative.  But  the  first  question  is,  does  such  conflict  exist?  It  can 
not  be  maintained  that  the  first  clause  of  Sec.  8,  Art.  11,  is  violated 
by  the  Act  of  February  24,  1870,  c.  71,  because  this  Act  does  not 
suspend  any  general  law  for  the  benefit  of  an  individual,  nor  is  it  a 
law  for  the  benefit  of  individuals,  inconsistent  with  the  general  laws. 

But  it  is  insisted  that  the  next  clause  in  Sec.  8,  Art.  11,  is  incon- 
sistent with,  and  restrictive  of  Sec.  28,  Art.  2,  and,  therefore,  that 
the  Act  of  February  24,  1870,  c.  71y  being  in  violation  of  the  re- 
strictive section,  is  unconstitutional.  If  the  premise  is  correct,  the 
conclusion  is  legitimate.  Then  the  enquiry  is  Does  the  Act  of  Feb- 
ruary 24,  1870,  c.  71,  grant  to  any  individual  or  individuals,  rights, 
privileges,  immunities,  or  exemptions,  other  than  such  as  may  be, 
under  that  Act,  extended  to  any  other  member  of  the  community? 
The  Act  fixes  a  maximum  tax  on  photographers  of  $35;  and  this  is 
assessed  on  all  who  have  galleries  in  cities  of  3,000  inhabitants  and 
over.  There  are  no  rights,  privileges,  immunities,  or  exemptions, 
granted  to  such  artists,  which  may  not  be  extended  by  this  law  to 
any  other  member  of  the  community,  who  may  choose  to  open  a  gal- 
lery for  taking  photographs,  etc.,  in  a  city  of  3,000  inhabitants  or 
over.  It  is  not  easy  to  understand  what  kind  of  rights,  privileges, 


COLLECTOR  V.  BEGGS.  539 

immunities,  or  exemptions,  those  are  which  are  granted  to  an  artist 
by  taxing  him  $35  for  exercising  his  art. 

But  the  Act  assesses  a  tax  of  $20  on  those  photographers  who  exer- 
cise their  art  in  a  town  of  not  less  than  500  inhabitants  and  not 
more  than  3,000  inhabitants.  Is  this  class  legislation?  This  class 
of  artists  enjoy  no  rights,  privileges,  immunities,  or  exemptions, 
which  any  other  artist  can  not  enjoy  under  the  same  law.  If  the 
artist,  in  a  city  of  3,000  inhabitants  or  over,  desires  to  enjoy  the  ex- 
emption or  immunity  from  the  tax  of  $35,  under  this  Act,  he  can 
have  the  right  and  privilege  of  living  in  a  town  of  less  than  3,000 
inhabitants  and  not  more  than  500,  by  moving  his  gallery  there — 
the  Act  presents  no  obstacle  to  his  doing  so.  So,  in  like  manner, 
under  the  Act,  the  classes  of  artists  who  are  required  to  pay  $35,  or 
$20,  can  be  exempted  from  these  taxes  and  have  the  benefit  of  a  $5 
tax,  by  taking  their  galleries  into  a  500  inhabitant  town,  or  into  the 
country.  It  can  not  be  class  legislation  when  every  member  of  the 
community  has  the  right  to  turn  photographer,  and  exercise  his  art, 
either  in  a  city,  in  a  town,  or  in  the  country,  as  he  may  elect. 

As  to  the  policy  of  the  graduation  of  the  tax,  according  to  the  size 
of  the  city  or  town,  we  have  nothing  to  say.  This  is  a  matter  left  to 
the  discretion  of  the  Legislature  by  Art.  2,  Sec.  28;  and  we  do  not 
think  that  Art.  11,  Sec.  8,  contains  any  restriction  on  that  discretion 
which  has  been  violated  by  the  Act  of  February  24,  1870,  c.  71. 

We,  therefore,  reverse  the  judgment  of  the  Circuit  Court,  and  re- 
mand the  cause  to  be  further  proceeded  in. 


COLLECTOR  V.  BEGGS. 

Supreme  Court  of  the  United  States,  December,  1878. 
17  Wallace,  182. 

Error  to  the  Circuit  Court  for  the  Southern  District  of  Ohio;  the 
case  being  thus: 

Beggs,  a  distiller,  made  true  and  correct  reports  for  the  months 
of  September,  October  and  November,  1868,  of  all  spirits  by  him 
actually  produced.  The  amount  of  such  spirits,  so  reported,  exceeded 
80  percentum  of  the  producing  capacity  of  the  distillery  of  plaintiff 
for  the  said  months  respectively. 

He  also  paid  all  the  taxes  assessable  against  him  for  such  product 
so  reported. 


54U        TAXATION  OF  BUSINESS  AND  PKIVILEGE. 

But  by  a  survey  of  the  distillery,  which  had  been  made  in  pur- 
suance   of  the  act  of  July  20th,  1868,  and  in  force 

during  the  said  months  of  September,  October,  and  November,  1868, 
the  distillery  was  estimated  to  be  capable  of  producing  from  each 
bushel  of  grain  used  three  and  one-quarter  gallons  of  spirits. 

The  amount  reported  by  Beggs  as  having  been  produced  at  his 
distillery  during  the  said  months  was  less  than  three  and  one-quarter 
gallons  for  each  bushel  of  grain  by  him  used  during  that  time. 

Hereupon  the  assessor,  maintaining  that  Beggs  was  bound  to  pay 
taxes  upon  the  amount  of  three  and  one-quarter  gallons  for  each 
bushel  of  grain  used  by  him  during  those  months,  assessed  him  upon 
the  difference  between  the  amount  reported  in  his  returns 
aforesaid  and  the  said  estimated  product  of  three  and  one-quarter 
gallons  per  bushel  as  fixed  and  determined  in  the  survey;  and  made 
return  of  this  assessment  to  the  collector. 

On  demand  made  by  the  collector,  Beggs  paid  under  protest  the 
sum  assessed,  and  having  made  application  for  repayment  of  it  to  the 
Commissioner  of  Internal  Revenue,  who  refused  to  repay  it,  he 
brought  suit  in  the  court  below  against  the  collector,  one  Stevenson,  to 
recover  it. 

The  court  found  the  facts  above  stated  and  held  the  assessment 
illegal,  and  the  plaintiff  entitled  to  recover. 

Judgement  being  entered  accordingly,  the  collector  brought  the 
case  here. 

Mr.  Justice  STRONG  delivered  the  opinion  of  the  court. 
The  twentieth  section  of  the  act  of  Congress  in  question  prescribed 
a  mode  for  the  ascertainment  of  the  quantity  of  spirits  for  which  a 
distiller  was  required  to  account  in  his  monthly  returns  to  the  asses- 
sor. By  a  previous  section  the  distiller  was  required  to  make  a  return, 
but  the  twentieth  section  made  it  the  duty  of  the  assessor,  on  the  re- 
ceipt of  the  distiller's  first  return  in  each  month,  to  inquire  and  deter- 
mine whether  he  had  accounted,  in  his  return  for  the  preceding  month, 
for  all  the  spirits  produced  by  him,  and,  to  determine  the  quantity 
of  spirits  thus  to  be  accounted  for,  it  required  that  the  whole  quantity 
of  materials  used  for  the  production  of  spirits  should  be  ascertained. 
It  gave  also  a  rule  by  which  the  quantity  of  materials  used  for  the 
production  of  spirits  should  be  ascertained  and  settled  by  the  assessor, 
and  it  then  enacted  that  in  case  the  return  of  the  distiller  had  been 
less  than  the  quantity  thus  ascertained,  he  should  be  liable  to  be 
assessed  for  such  deficiency,  at  the  rate  of  fifty  cents  for  every  proof 
gallon,  together  with  the  special  tax  of  $4  for  every  cask  of  forty 
proof  gallons,  which  the  collector  was  required  to  collect.  It  also  en- 


COLLECTOR  V.  BEGGS.  541 

acted  that  in  no  case  should  the  quantity  of  spirits  returned  by  the 
distiller,  together  with  the  quantity  so  assessed,  be  less  than  80  per 
centum  of  the  producing  capacity  of  the  distillery,  as  estimated  under 
the  provisions  of  the  act. 

The  next  preceding  section  (the  19th)  made  it  the  duty  of  ever}7 
distiller,  on  the  1st,  llth,  and  21st  days  of  each  month,  or  within 
five  days  thereafter,  to  render  to  the  assistant  assessor  an  account  in 
duplicate,  taken  from  the  books  he  was  required  to  keep,  stating  not 
only  the  number  of  wine  gallons  and  of  proof  gallons  of  spirits  pro- 
duced and  placed  in  warehouse,  but  also  the  quantity  and  kind  of 
materials  used  for  the  production  of  spirits  each  day. 

The  purpose  of  these  requisitions,  as  well  as  of  many  others  made 
by  the  statute,  was  obviously  to  guard  against  fraudulent  returns,  and 
to  secure  to  the  government  a  tax  on  all  spirits  produced,  and  upon  all 
which  might  have  been  produced  from  the  quantity  of  materials  used. 
Hence  the  distiller  was  required  to  return,  not  merely  the  amount  of 
his  product,  but  the  kind  and  quantity  of  materials  used  by  him,  and 
the  assessor  was  directed  to  test  the  accuracy  of  that  return,  and  to  esti- 
mate, from  the  quantity  of  materials  ascertained  by  him  to  have  been 
u=ed.  the  number  of  gallons  of  spirits  which  should  have  been  ac- 
counted for.  The  quantity  of  materials  used,  as  ascertained  by  the 
assessor,  was  made  a  measure  of  production,  and  upon  all  spirits  ascer- 
tained by  that  measure  to  have  been  produced,  either  actually  or 
potentially,  the  distiller  was  expressly  required,  by  the  twentieth  sec- 
tion, to  pay  the  tax,  without  any  reference  to  his  return,  or  to  what 
had  actually  been  produced.  In  no  case  could  he  escape  from  liability 
to  pay  a  tax  on  at  least  80  per  centum  of  what  his  distillery  was  esti- 
mated to  be  capable  of  producing,  but  if  he  produced  more,  or  if  the 
quantity^  of  materials  which  he  had  used,  as  ascertained  and  deter- 
mined by  the  assessor,  showed  that  his  production  had  been  or  should 
have  been  greater,  he  was  subjected  to  the  required  tax  on  the  quantity 
of  spirits  which  that  ascertained  quantity  of  materials  was  capable  of 
producing,  and  not  merely  upon  80  per  centum  of  that  quantity. 
This  was  the  unequivocal  language  of 'the  act.  Thus  the  quantity  of 
materials  used,  as  ascertained  ly  the  assessor,  and  not  the  actual  pro- 
duct of  spirits,  was  made  the  measure  of  liability  to  taxation  and  of  its 
extent. 

This  construction  of  the  20th  section  is  in  entire  harmony  with  all 
the  other  parts  of  the  act.  The  10th  section  directed  a  survey  of  every 
distillery  registered,  or  intended  to  be  registered,  for  the  production 
of  spirits,  in  order  to  estimate  and  determine  its  true  producing  ca- 
pacity. This  survey  was  required  to  be  made  bj  the  assessor  of  the 


542        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

collection  district,  with  the  aid  of  some  competent  and  skilful  person, 
to  be  designated  by  the  Commissioner  of  Internal  Revenue.  The  mode 
in  which  the  producing  capacity  of  the  distillery  was  to  be  ascertained, 
as  prescribed  by  the  regulations  of  the  commissioner,  was  by  measur- 
ing each  mash,  or  fermenting  tub  by  calculating  how  many  bushels 
of  grain,  when  mashed  (if  grain  was  used),  the  fermenters  would 
hold,  by  considering  the  period  of  fermentation,  and  deducing  there- 
from the  number  of  bushels  which  could  be  fermented  in  twenty-four 
hours.  This  ascertained,  the  assessor  and  his  assistant  were  directed 
to  estimate  the  quantity  of  spirits  that  could  be  produced  in  the  dis- 
tillery from  a  bushel  of  grain,  and  multiplying  that  by  the  number  of 
bushels  that  could  be  fermented  therein  in  twenty-four  hours,  the 
producing  capacity  of  the  distillery  was  to  be  ascertained  and  fixed  as 
a  standard  of  taxation,  or  rather  to  determine  the  minimum  of  taxa- 
tion. At  all  events  the  distiller  was  made  taxable  for  a  production  of 
spirits  not  less  than  80  per  cent,  of  the  producing  capacity  of  his 
distillery,  as  determined  by  the  survey,  whether  that  quantity  was 
actually  produced  by  him  or  not;  or  whether  he  used  a  bushel  of 
grain  or  not.  Eighty  per  cent,  of  the  estimated  (not  the  actual) 
capacity  of  the  distillery,  was  the  smallest  amount  for  which  he  was 
taxable.  But  if  he  actually  produced  more,  or  if  the  quantity  of  grain 
or  other  materials  used  for  distillation,  as  ascertained  by  the  asses- 
sor, showed  a  larger  production,  he  was  made  taxable  to  the  full  extent 
of  that  production  thus  shown.  No  other  interpretation  can  be  given 
to  the  20th  section. 

Now,  applying  this  to  the  facts  of  this  case,  as  found  by  the  Circuit 
Court,  it  becomes  very  evident  that  the  judgment  should  have  been 
given  for  the  defendant  below. 

It  is  true  the  actual  production  of  spirits  for  the  three  months, 
September,  October,  and  November,  1868,  as  returned  by  the  plaintiff 
below,  and  correctly  returned,  was  more  than  80  per  cent,  of  the 
producing  capacity  of  his  distillery  for  those  three  months.  Whether 
it  was  more  than  80  per  cent,  of  the  producing  capacity,  as  determined 
by  the  survey,  provided  for  in  the  tenth  section  of  the  act,  is  not  found, 
nor  is  it  material.  It  is  found  that  by  reason  of  the  survey  made  in 
pursuance  of  that  section,  the  distillery  was  estimated  to  be  capable  of 
producing  from  each  bushel  of  grain  used,  three  and  one-quarter  gal- 
lons of  spirits ;  that  the  quantities  reported  by  the  plaintiff,  as  having 
been  produced  during  those  three  months,  were  less  than  three  and 
one-quarter  gallons  for  each  bushel  of  grain  used  by  him  during  that 
time,  and  that  th.e  additional  assessment  was  made,  of  which  he  com- 
plains, was  for  the  difference  between  the  quantity  reported  in  his  re- 


BURLINGTON  V.  PUTNAM  INS.  CO.  543 

turns  and  the  estimated  product  of  three  and  one-quarter  gallons  for 
each  bushel  of  grain  used,  the  possible  production  determined  by  the 
survey.  Such  being  the  facts,  as  found,  the  plaintiff  was  expressly 
declared  by  the  20th  section  to  be  assessable  for  the  difference  between 
his  return  and  the  estimated  possible  product,  and  it  was  made  the 
duty  of  the  collector  to  collect  it.  The  survey  and  estimate  of  pro- 
ducing capacity  made  under  the  10th  section  were  conclusive,  while 
they  remained,  though  subject  to  revision,  under  the  direction  of  the 
Commissioner  of  Internal  Eevenue.  And  the  extent  of  liability  to 
taxation  was,  under  the  act  of  Congress,  directed  to  be  measured,  not 
by  the  actual  product  of  spirits  but  by  what  should  have  been  the 
product  of  the  materials  used,  according  to  the  estimate  made  under 
the  10th  section. 

It  follows  that  the  assessment  made  was  legal,  and  that  the  plaintiff 
is  not  entitled  to  recover.  The  Circuit  Court,  therefore,  erred  in  giv- 
ing judgment  for  the  plaintiff. 

JUDGMENT  REVERSED,  and  the  record  remitted  with  instructions 
to  enter  JUDGMENT  FOR  THE  DEFENDANT. 


III.    LOCAL  TAXATION. 
CITY  OF  BURLINGTON  V.  PUTNAM  INSURANCE  CO. 

Supreme  Court  of  Iowa.    December,  1870. 
31  Iowa,  102. 

This  action  is  brought  to  recover  certain  license  fees  and  assess- 
ments levied  under  the  ordinances  of  the  city  of  Burlington.  A  de- 
murrer to  the  petition  was  sustained.  Plaintiff  appeals. 

BECK,  J.  By  an  amendment  to  the  charter  of  the  city  of  Burling- 
ton the  city  council  is  empowered  "to  levy  and  collect  taxes  on  all 
real  and  personal  property  in  said  city,  not  exempt  by  the  general  law 
from  taxation;"  and  also  "to  grant  or  refuse  licenses"  to  insurance 
companies,  other  than  mutual  companies,  and  "to  require  and  receive 
for  such  licenses  such  sums  of  money  as  they  may  deem  expedient  and 
just."  Acts,  4th  Gen.  Assem.,  ch. -49.  By  an  ordinance  of  the  city, 
it  is  provided  that  "there  shall  be  levied  and  collected  on  every  license 
granted  for  any  business  or  object  herein  specified,  as  follows:  that 
sum  which  the  city  council  shall,  by  resolution  of  record,  from  time 
to  time,  declare."  The  business  of  insurance  is  specified  in  the  ordi- 


544        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

nance  as  subject  to  license.  By  a  subsequent  resolution  of  the  city 
council  it  is  declared  that  ''insurance  companies  or  agencies  shall  pay 
into  the  city  treasury,  quarterly,  under  oath,  one  per  cent,  on  their 
premiums,  and,  in  addition  thereto,  the  following  sums  for  licenses. 
Those  companies  or  agencies  whose  premiums  amount  to  less  than 
$500  shall  pay  $5;  thofe  whose  premiums  amount  to  $500  and  less 
than  $1,000,$10 ;  those  whose  premiums  amount  to  $1,000  and  less  than 
$1,500,  $15;  those  whose  premiums  amount  to  $1,500  and  over,  $15." 
Under  this  ordinance  and  resolution,  defendant  failing  to  pay  the  as- 
sessments therein  authorized  upon  the  receipt  of  premiums  to  the 
amount  of  $570.  this  action  is  brought  to  recover  the  same. 

Defendant  demurred  to  the  petition  on  the  grounds  that  the  license 
and  tax  which  the  plaintiff  seeks  to  recover  is  not  authorized  by  the 
laws  of  the  State,  and  the  ordinance  and  resolution  set  out  in  the 
petition  are  not  sufficient  to  authorize  the  license  and  tax.  There  is 
another  objection  set  out  in  the  demurrer,  but  as  it  is  not  presented 
in  argument  in  this  court  by  counsel  it  need  not  be  noticed  in  this 
opinion. 

It  is  necessary  to  consider  the  assessment  of  one  per  centum  upon 
the  amount  of  premiums  received,  and  the  amount  imposed  for  a  li- 
cense, separately. 

I.  It  cannot  be  fairly  claimed  that  the  one  per  centum  is  a  charge 
for  license.  The  resolution  authorizing  the  collecting  of  that  sum  ex- 
pressly distinguishes  the  two.  It  in  terms  requires  the  payment  of  the 
one  per  centum,  and  then  declares  that  there  shall  be  collected  "in  addi- 
tion thereto  the  following  sums  for  licenses,"  specifying  the  amounts 
to  be  paid.  The  one  per  centum  is  clearly  not  required  to  be  paid  for 
or  on  account  of  the  license.  It  is,  then,  an  assessment  in  the  nature 
of  a  tax.  Is  the  city  authorized  to  levy  it?  It  may  levy  and  collect 
taxes  upon  the  real  and  personal  property  in  the  city,  and  this  is  the 
extent  of  its  taxing  power.  It  is  a  well  settled  rule  that  taxes  can  be 
levied  and  collected  by  municipal  corporations  only,  as  the  power  is 
conferred  upon  them  by  the  legislature;  from  that  source  they  derive 
authority  to  levy  taxes,  and  it  must  be  exercised  in  the  manner  pre- 
scribed in  their  charters.  The  power  conferred  in  this  instance  is  to 
levy  and  collect  taxes  upon  real  and  personal  property.  It  is  not  pre- 
tended that  the  one  per  centum  is  levied  on  account  of  real  estate 
owned  by  the  defendant,  but  it  is  an  assessment  upon  an  income  from 
premiums.  This  income  cannot  be  considered  as  personal  property, 
and  is.  therefore,  not  liable  to  taxation  as  such.  This  point  was  ruled 
in  The  City  of  Dubuque  v.  The  Northwestern  Mutual  Life  Ins.  Co., 
29  la.  9. 


BUKLINGTON  V.  PUTNAM  INS.  CO.  545 

The  one  per  centum  assessment  is,  in  our  opinion,  unauthorized  by 
the  charter  of  the  city. 

II.  The  charge  imposed  for  licenses  will  now  be  considered.  The 
city  is  authorized  to  grant  licenses  and  charge  therefor  such  sums  as  it 
may  deem  expedient  and  just.  It  is  argued  by  defendant's  counsel 
that  the  charter,  or  rather  the  amendment  thereto,  so  far  as  it  be- 
stows the  power  of  imposing  licenses  upon  insurance  companies,  is 
repealed  by  section  38  of  chapter  138,  acts  twelfth  general  assembly, 
regulating  the  taxation  to  be  imposed  upon  them;  but  the  amended 
charter  of  the  city,  giving  the  licensing  power,  is,  we  conclude,  not 
repealed  by  the  act  named,  for  the  following  reasons :  The  two  acts 
do  not  relate  to  the  same  subject.  The  provision  of  the  charter  relates 
to  the  licensing  of  the  insurance  companies,  and  grants  the  power  as 
a  part  of  the  police  authority  of  the  city.  The  section  of  the  act  cited, 
as  repealing  this  provision,  relates  to  the  taxation  of  insurance  com- 
panies. These  acts,  therefore,  cannot  be  in  conflict,  and  by  no  rule 
of  construction  can  the  last  act  be  held  to  repeal,  by  implication,  the 
authority  conferred  in  the  charter  to  license  insurance  companies. 
But  it  is  said  that  the  license  issued  by  the  city  is  for  the  purpose  of 
revenue  and  is,  therefore,  a  tax.  We  will  not  determine  the  question 
whether,  if  it,  in  fact,  amounts  to  a  tax  under  the  charter,  the  author- 
ity to  levy  it  is  taken  away  by  the  act  providing  for  the  taxation  of 
insurance  companies  above  referred  to.  We  will  dispose  of  the  point 
raised  upon  a  different  view,  and  will  not  touch  the  question  of  re- 
peal thus  raised. 

We  may  concede  that  a  power  to  license  will  not  authorize,  under 
the  guise  of  licenses,  taxation  for  revenue ;  that  licenses  are  a  part  of 
the  police  regulations  of  a  city,  and  should  be  charged  for  as  such, 
and  only  to  such  extent  as  may  reasonably  compensate  the  city  for 
issuing  and  enforcing  the  license,  and  for  the  care  exercised  by  the 
city,  under  its  police  authority,  over  the  particular  person  licensed. 
But  who  shall  determine  what  sum  is  within  these  bounds?  The 
charter  of  the  city  leaves  this  question  with  the  city  council,  who  are 
authorized  to  charge  such  sums  "as  they  may  deem  expedient  and 
just.*'  The  legislature  evidently  intended  they  should  determine  the 
proper  sura  to  be  charged  for  licenses.  We  must  not  be  understood  as 
holding  that  a  court  cannot,  in  any  case,  interfere  if  the  sum  should 
be  clearly  unjust  or  oppressive,  or  levied  for  the  purpose  of  raising 
revenue.  But  in  the  case  before  us  no  such  showing  is  made.  We 
cannot  say  that  the  charges  fixed  by  the  council  are  not  such  as  are 
necessary  and  proper  compensation  for  the  expense  and  enforcement 
of  the  license  and  the  protection  of  defendant  undef  police  regulations 
35 


546        TAXATION  OF  BUSINESS  AND  PEIVILEGE. 

connected  with  or  growing  out  of  the  license.    The  State,  for  the  use, 
etc.,  v.  Herod,  29  Iowa,  123. 

It  is  urged  that  the  charge  for  licenses  are  not  the  same  upon  all 
companies,  but  is  varied  to  correspond  with  the  income  of  the  par- 
ties taking  licenses.  This  is  not  a  good  objection.  The  right  and 
power  vested  in  the  city  to  fix  the  charge  would  authorize  them  to 
vary  it  with  different  parties,  as  they  may  deem  prudent  and  just. 
The  difference  in  the  charges  appears  to  me  to  be  based  upon  just 
grounds.  The  city  is  authorized  to  license  vehicles.  It  would  be  just 
that  those  of  different  capacities  should  be  charged  different  sums. 
The  same  reasons  that  would  justify  such  course  of  dealings  with 
vehicles  supports  the  difference  in  charges  for  licenses  to  insurance 
companies. 

The  demurrer,  so  far  as  it  was  directed  at  the  right  of  plaintiff  to 
recover  the  one  per  centum  upon  the  premiums  of  defendant,  was 
rightly  sustained,  but  the  decision  thereon  against  the  power  of  the 
city  to  license  and  collect  charges  therefor,  as  provided  in  the  ordi- 
nance and  resolution  of  the  city  council,  is  erroneous.  The  judgment 
of  the  district  court  is  therefore  reversed  and  the  cause  will  be  re- 
manded for  further  proceedings  not  inconsistent  with  this  opinion. 

Reversed. 


MAYOR  ETC.  OF  NEW  YORK  V.  SECOND  AVE.  R.  R.  CO. 

Court  of  Appeals  of  New  York,  March,  1865. 
82  New  York,  261. 

This  action  was  brought  to  recover  the  penalty  of  fifty  dollars,  im- 
posed by  an  ordinance  passed  by  the  plaintiffs  December  31,  1858, 
upon  the  proprietor  of  every  passenger  railroad  car  running  in  the 
city  of  New  York  below  125th  street,  who  should  not  procure  a  license 
from  the  mayor  for  each  car,  and  pay  annually  therefor  the  fee' of 
fifty  dollars. 

All  the  facts  alleged  in  the  complaint  are  admitted  by  the  answer ; 
but  the  defendants  set  up  as  a  defense  an  agreement  made  between  the 
plaintiffs  and  the  defendants'  assignors,  dated  December  15,  1852, 
whereby  permission  was  granted  to  such  assignors  to  construct  and 
operate  a  railroad  in  Second  avenue,  and  which,  they  contend,  estops 
the  plaintiffs  from  requiring  any  license. 

To  this  answer  there  was  a  demurrer,  which  was  overruled  at  Spe- 


MAYOB  V.  SECOND  AVE.  B.  R.  CO.  547 

cial  Term,  and  the  judgment  affirmed  at  General  Term,  INGRAHAM, 
J.,  dissenting. 

From  that  judgment  the  plaintiffs  appeal  to  this  court. 

The  only  question  presented  is  that  of  the  validity  of  the  ordinance 
of  December  31,  1858. 

BROWN,  J. 

The  plaintiffs  must  show,  however,  that  the  subject  of  the  ordinance 
which  they  are  seeking  to  enforce,  is  one  over  which  they  have  author- 
ity to  legislate,  and  that  it  is  a  regulation  of  police  and  internal  gov- 
ernment, and  not  the  mere  imposition  of -a  duty  or  sum  of  money  for 
the  purposes  of  revenue.  The  agreement  betwen  the  plaintiffs  and 
Pearsall  and  his  associates,  of  the  15th  December,  1852,  has  all 
the  properties  of  a  contract. 

This  right  of  regulation  and  control  the  plaintiff  specially  reserved 
in  the  instrument  creating  the  grant,  in  addition  to  their  general 
powers  to  make  ordinances  and  regulations  of  police  for  the  govern- 
ment of  the  city.  This  brings  me  to  consider  the  nature  and  character 
of  the  ordinance  for  the  breach  of  which  this  action  is  brought. 

Section  106  declares  that  "each  and  every  passenger  railroad  car 
running  in  the  city  of  New  York  below  125th  street,  shall  pay  into 
the  city  treasury  the  sum  of  fifty  dollars  annually  for  a  license,  a  cer- 
tificate of  such  payment  to  be  procured  from  the  mayor,  except  the 
small  one  horse  passenger  cars,  which  shall  each  pay  the  sum  of 
twenty-five  dollars  annually  for  such  license  as  aforesaid/'  Section  2 
declares  that  "each  certificate  of  payment  of  license  shall  be  affixed  to 
some  conspicuous  place  in  the  car,  that  it  may  be  inspected  by  the 
proper  officer."  And  section  3  prescribes  the  penalty  for  running  a 
car  without  the  proper  certificate.  That  is  all.  There  is  nothing  for 
the  railroad  corporations  to  do  but  to  pay  to  the  mayor  the  sum  of  fifty 
dollars  annually  for  each  car,  and  receive  in  return  a  license  or  certifi- 
cate that  the  money  has  been  paid.  The  ordinance  imposes  no  duties 
to  be  observed  by  the  company  or  its  servants,  but  the  single  act  of 
paying  the  money.  It  prescribes  no  regulations  in  regard  to  the  size, 
dimensions,  comfort  and  cleanliness  of  the  cars,  the  speed  at  which 
the  same  shall  be  run,  the  manner  of  receiving  and  discharging  pas- 
sengers, their  numbers  and  names,  and  the  stations  at  which  they 
shall  stop.  Regulations  of  police  are  regulations  of  internal  or  domestic 
government,  forbidding  some  things  and  enjoining  the  performance 
of  others  for  the  security  and  protection,  and  to  promote  the  happi- 


548        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

ness  of  the  governed.  The  only  act  enjoined  by  the  ordinance  in 
question  is  the  payment  of  the  fifty  dollars,  and  the  only  act  which  it 
forbids  and  prohibits  is  the  running  of  the  cars  without  the  payment 
of  the  money.  If  the  legislature  should  by  law  require  every  head  of 
a  family  throughout  the  State  to  pay  to  the  collector  the  sum  of 
twenty  dollars,  and  take  his  receipt  therefor,  it  would  be  a  fiscal  meas- 
ure, an  expedient  to  replenish  the  treasury,  not  a  regulation  of  police 
prescribing  a  rule  of  action  and  conduct.  So  with  this  ordinance,  call 
what  it  requires  by  the  name  of  license  or  certificate  of  payment  or 
anything  else,  its  primary,  and  indeed,  only  purpose  is  to  take  from 
the  company,  under  coercion  of  the  penalty  which  it  imposes,  the  sum 
of  fifty  dollars  annually  for -each  car  run  upon  the  road  for  the  benefit 
of  the  city.  The  certificate  which  the  company  is  to  receive  upon  pay- 
ment being  made,  is  called  a  license  in  the  ordinance.  A  license  to 
do  what  the  ordinance  does  not  say — and  indeed  it  could  not,  with 
truth,  say — a  license  or  permission  to  employ  the  car  in  the  transpor- 
tation of  passengers  upon  the  road,  for  the  absolute  right  to  do  that 
which  had  been  not  only  acquired,  but  positively  enjoined  upon  the 
company  by  the  stipulations  of  the  grant  of  the  15th  of  December, 
1852.  It  is  vain,  therefore,  to  speak  of  it  or  treat  it  as  a  license,  or  a 
regulation  of  police.  It  is  the  imposition  of  an  annual  tax  upon  the 
company  in  derogation  of  its  rights  of  property,  and  on  that  account 
is  unlawful  and  void. 

The  judgment  of  the  supreme  court  should  be  affirmed,  with  costs. 
Judgment  affirmed. 

The  reverse  is  true,  i.  e.,  the  power  to  tax  does  not  give  power  to  license. 
Burlington  v.  Baumgardner,  42  Iowa  673.  Further,  power  to  regulate  does 
not  give  power  to  license,  ibid,  or  to  charge  a  fee.  Dunham  v.  Rochester, 
5  Cowen  462;  Kip  v.  Patterson,  26  N.  J.  L.  298.  So  also  the  licensing  of 
an  occupation  does  not  exempt  it  from  the  tax  power.  Ould  v.  Richmond, 
23  Grattan  464,  infra.  The  distinction  between  the  taxing  power  and  the 
police  power,  where  it  is  combined  with  the  power  to  license,  does  not  how- 
ever preclude  the  imposition  of  a  fee  where  only  the  police  power  of  licensing 
is  possessed.  Thus  in  all  cases  a  fee  sufficient  to  pay  the  expense  of  issuing 
the  license  may  be  demanded.  Van  Hook  v.  City  of  Selma,  70  Ala.  361. 
But  in  case  of  trades  whose  influence  like  that  of  the  liquor  trade  is  believed 
to  be  harmful,  a  fee  large  enough  in  amount  to  discourage  the  trade  may 
be  demanded  merely  where  the  licensing  power  is  possessed.  Tenney  v. 
Lenz,  16  Wis.  566.  See  also  City  of  Chester  v.  W.  U.  Tel.  Co.,  154  Pa.  St. 
464;  W.  U.  Tel.  Co.  v.  Borough  of  New  Hope,  187  U.  S.  419,  supra. 


CITY  OF  NEWTON  V.  ATCH1NSO.N.  549 


CITY   OF  NEWTON  V.   ATCHINSON. 

Supreme  Court  of  Kansas.    July,  188S. 
31  Kansas,  151. 

Action  by  T.  B.  Atchinson  and  another,  (partners  as  Atchinson  & 
Knowlton,)  and  others,  against  the  City  of  Newton  and  three  others, 
to  perpetually  enjoin  said  city  and  its  officers  from  enforcing  against 
plaintiffs,  as  hardware  and  implement  merchants  therein,  a  certain 
ordinance  levying  a  business  license  tax  against  them.  March  6, 
1883,  Hon.  L.  HOUK,  judge  of  the  district  court,  at  chambers,  over- 
ruled defendants'  motion  to  dissolve  a  temporary  order  of  injunction 
theretofore  granted  in  favor  of  plaintiffs.  This  ruling  the  defend- 
ants bring  to  this  court.  The  facts  are  sufficiently  stated  in  the  opin- 
ion. 

The  opinion  of  the  court  was  delivered  by 

BREWER,  J. :  The  question  in  this  case  is  as  to  the  validity  of  a 
certain  ordinance  of  the  City  of  Newton,  providing  for  the  levy  and 
collection  of  a  license  tax. 

•          •»••••••» 

.  .  .  .  The  plaintiffs  in  the  present  case,  defendants  in  error 

here,  were  all  hardware  merchants They  challenge 

the  validity  of  this  ordinance  so  far  as  it  imposes  upon  their  busi- 
ness, that  of  hardware  merchants,  a  license  tax The 

first  section  of  the  ordinance  contains  all  the  facts  necessary  to  a 
full  understanding  of  the  questions  involved.  That  section  reads: 

"That  a  license  tax  per  annum  is  hereby  levied  upon  all  merchant* 
or  persons  engaged  in  merchandising,  as  follows,  to  wit:  Five  dol- 
lars upon  all  persons  whose  average  amount  of  stock  does  not  ex- 
ceed one  thousand,  and  two  dollars  and  fifty  cents  in  addition  thereto 
for  every  one  thousand  dollars  or  fractional  part  thereof  in  excess  of 
the  first  thousand  dollars." 

Before  noticing  some  specific  objections  which  are  made  to  this 
particular  tax,  we  think  it  proper  to  state  certain  general  proposi- 
tions which  underlie  this  matter  of  a  license  tax. 

First.  In  the  absence  of  any  inhibition,  express  or  implied,  in  the 
constitution,  the  legislature  has  power,  either  directly  to  levy  and 
collect  license  taxes  on  any  business  or  occupation,  or  to  delegate  like 
authority  to  a  municipal  corporation.  This  seems  to  be  the  concur- 
rent voiae  of  all  the  authorities. 

Second.    There  is  no  inhibition,  express  or  implied,  in  our  consti- 


550        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

tution,  on  the  power  of  the  legislature  to  levy  and  collect  license 
taxes,  or  to  delegate  like  power  to  municipal  corporations.  It  is  not 
pretended  that  there  is  any  express  inhibition.  It  has  been  contended 
that  §  1,  art.  11,  creates  an  implied  inhibition,  and  this  because  ii 
reads  that  "the  legislature  shall  provide  for  a  uniform  and  equal 
rate  of  assessment  and  taxation."  But  that  section  obviously  refers 
to  property,  and  not  to,  license  taxes 

In  Burroughs  on  Taxation,  §  54,  referring  to  the  various  provis- 
ions in  the  different  constitutions  as  to  uniformity  and  equality,  the 
author  adds: 

"These  provisions,  as  a  general  rule,  are  held  to  apply  to  property 
alone,  and  not  to  include  taxation  on  privileges  or  occupations." 

Sedgwick,  in  commenting  upon  this  subject,  says: 

"In  construing  these  provisions,  it  has  been  held,  in  many  of  the 
states,  that  the  words  'equal'  and  'uniform'  apply  only  to  a  direct 
tax  on  property,  and  that  the  clause  in  regard  to  uniformity  of  taxa- 
tion does  not  limit  the  power  of  the  legislature  as  to  the  object  of 
taxation,  but  was  only  intended  to  prevent  an  arbitrary  taxation,  ac- 
cording to  the  kind  or  quality,  without  regard  to  value.  Specific 
taxes  have  therefore  been  sustained  as  a  valid  exercise  of  the  legis- 
lative power."  ( See  Sedg.  on  Stat.  and  Cbnst.  Law,  2d  ed.,  504- 
507.) 

•  •    '  h  •  •  •  •  •  •  • 

Passing  now  to  some  specific  questions  raised  as  to  this  particular 
tax,  we  remark — 

Third.  That  §  3  of  chapter  40,  Laws  of  1881,  gives  express  au- 
thority to  levy  and  collect  license  taxes  on  certain  occupations. 

The  language  of  the  section  seems  plain.     It  reads, 

"The  city  council  shall  have  exclusive  authority  to  levy  and  collect 
a  license  tax  on  auctioneers,"  etc.  We  cannot  see  how  language  can 
be  plainer.  Every  part  of  the  sentence  points  toward  this  power. 
The  verbs  used  are  "levy  and  collect,"  words  generally  used  in  ref- 
erence to  taxes,  and  not  very  apt  in  respect  to  mere  licenses.  The 
city  is  authorized  to  levy  and  collect  a  license  tax.  The  principal 
word  here  is  "tax,"  and  the  term  "license"  simply  qualifies  and  de- 
scribes it.  Where  nothing  but  license  is  contemplated,  the  language 
ordinarily  is  direct,  and  grants  power  "to  license,"  or  "to  license  and 
regulate,"  or  "to  adopt  rules  and  regulations  for  licensing." 

Fourth.  The  validity  of  the  tax  is  challenged  on  the  ground  that 
in  the  charter  there  has  been  no  compliance  with  §5,  art.  12  of  the 
state  constitution,  which  reads: 


CITY  OF  NEWTON  Y.  ATCHINSON.  551 

"Provision  shall  be  made  by  general  law  for  the  organization  of 
cities,  towns  and  villages;  and  their  power  of  taxation,  assessment, 
borrowing  money,  contracting  debts  and  loaning  their  credit,  shall  be 
so  restricted  as  to  prevent  the  abuse  of  such  power." 

It  is  said  that  the  charter  contains  no  restrictions  with  regard  to 
these  license  taxes.  If  it  were  true  that  there  was  absolutely  no  re- 
striction, it  might  well  be  held  that  the  power  was  not  granted;  and 
yet  there  are  very  respectable  authorities,  and  indeed  the  weight  of 
authority  seems  to  be  to  the  effect,  that  it  is  purely  a  matter  of  legis- 
lative discretion.  In  1  Dillon  on  Municipal  Corporations,  3d.  ed. 
§  50,  the  author,  after  quoting  from  the  constitution  of  New  York 
a  section  similar  to  the  one  in  our  constitution,  observes: 

"This  obviously  enjoins  upon  the  legislature  the  duty  of  providing 
suitable  and  proper  restrictions  upon  the  enumerated  powers;  but  in 
what  these  restrictions  shall  consist,  and  how  they  shall  be  imposed, 
are  subjects  left  to  the  discretion  or  sense  of  duty  of  the  legislative 
department,  with  the  exercise  of  which  the  courts  cannot  interfere.'* 

In  Hill  v.  Higdon,  5  Ohio  St.  248,  the  court,  by  Eanney  J.,  says 
that  a  failure  of  the  legislature  to  observe  these  constitutional  re- 
quirements "may  be  of  a  very  serious  import,  but  lay  no  foundation 
for  judicial  correction."  In  Cooley  on  Taxation,  page  252,  we  find 
the  law  thus  stated: 

"By  some  state  constitutions  it  is  expressly  made  the  duty  of  the 
legislature,  in  conferring  local  power  of  taxation,  to  impose  restric- 
tions on  the  power  in  order  to  prevent  its  abuse.  Such  a  provision  is 
addressed  to  the  discretion  of  the  legislature,  which  will  impose  such 
and  such  only  as  are  deemed  advisable." 

See  also  the  authorities  cited  in  the  note,  as  well  as  those  in  the 
note  to  the  quotation  from  Dillon,  supra. 

But  this  constitutional  provision  has  been  before  this  court,  and 
has  here  received  a  judicial  construction.  (Hines  v.  City  of  Leaven- 
worth,  3  Kas.  203.)  In  that  case,  while  the  necessity  of  some  restric- 
tion was  insisted  upon,  it  was  held  that  full  discretion  as  to  what 
restrictions  should  be  imposed  was  left  to  the  legislature;  and  that 
the  court  would  not  interfere  even  though  of  the  opinion  that  the 
restrictions  were  not  sufficient  to  prevent  abuses.  In  that  case  two 
or  three  restrictions  of  a  very  trivial  nature  were  adjudged  sufficient. 
Here  it  is  provided  that  no  tax  shall  be  levied  except  by  ordinance, 
and  such  ordinance  must  receive  a  majority  of  all  the  votes  of  the 
councilmen  elected,  and  that  the  vote  must  be  taken  by  yeas  and 
nays,  and  entered  upon  the  record  of  the  proceedings  of  the  council. 
It  is  true  there  is  no  restriction  upon  the  amount  of  tax  which  may 


552        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

be  levied;  no  more  was  there  in  the  case  in  3  Kas.,  supra.  Instead 
of  being  a  direct,  in  that  case  as  well  as  this,  there  is  only, 
so  to  speak,  an  indirect  restriction,  and  yet  if  the  legislature  deems 
this  indirect  restriction  sufficient,  it  is  not  for  the  courts  to  ignore 
it  and  say  it  amounts  to  nothing.  • Therefore  this  ob- 
jection to  the  validity  of  this  tax  also  fails. 

Fifth.  It  is  finally  objected  that  this  tax  is  in  effect  a  property 
tax,  and  therefore  void.  This  is  based  upon  the  language  of  the  sec- 
tion heretofore  quoted.  The  tax  upon  merchants  is  graduated  by  the 
average  amount  of  stock.  If  that  average  does  not  exceed  $1,000,  the 
tax  is  $5  per  annum,  and  for  each  $1,000  or  fractional  part  thereof 
in  excess,  $2.50.  Therefore,  being  graduated  by  the  amount  of  prop- 
erty, it  is  in  substance  and  effect  only  a  property  tax.  This  is  the 
difficult  question  in  the  case.  The  argument  is,  that  the  law  regards 
substance  rather  than  form;  that  you  may  not  do  indirectly  what 
you  cannot  do  directly;  that  it  would  be  clearly  invalid  to  levy  a  tax 
on  a  merchant's  property  of  five  mills — that  being  the  levy  on  all 
other  taxable  property — and  then  impose  a  second  tax  of  five  mills 
on  his  property  alone.  If  this  cannot  be  done  by  a  direct  tax  on  his 
property,  it  cannot  be  done  indirectly  by  calling  the  second  tax  one 
on  business.  The  language  of  the  ordinance  is  similar  to  that  in  the 
general  tax  law,  and  the  tax  is  in  each  case  graduated  by  the  aver- 
age amount  of  stock.  While  the  right  to  graduate  a  business  tax  may 
be  conceded,  yet  the  graduation  must  be  by  some  standard  which  is  a 
fair  criterion  of  the  amount  of  business.  The  amount  of  stock  is 
not  such  a  criterion,  for  though  one  man's  stock  may  be  large,  his 
sales  may  be  few  and  his  business  limited ;  while  another  whose  stock 
averages  much  less  may  do  a  much  larger  business,  selling  and  re- 
placing with  greater  rapidity.  The  amount  of  stock  may  be  a  test  of 
property,  but  not  of  business. 

In  support  of  these  views,  counsel  cite  the  following  authorities : 
Livingston  v.  City  of  Albany,  41  Ga.  21;  Commonwealth  v.  Stodder, 
2  Gush.  572;  Durham  v.  Trustees,  5  Cow.  466;  Mayor  v.  Rid.  Co., 
32  N.  Y.  373;  State  v.  Bid.  Co.,  40  Md.  22;  State  v.  Bid.  Co.,  4  S. 
C.  376;  Orleans  v.  Pierre  Nongues,  11  La.  An.  740;  Burroughs  on 
Taxation,  69  and  70;  Bank-Tax  Case,  2  Wall.  200;  Cooley  on  Taxa- 
tion, page  164. 

But  notwithstanding  the  plausibility  of  this  argument,  we  are 
constrained  to  think  it  not  sound.  The  tax  provided  by  this  ordi- 
nance is  in  terms  a  tax  upon  business.  The  results  of  a  tax  do  not 
determine  its  character.  Every  license  tax  compels  the  party  to  pay 
more  taxes  than  his  taxable  property  justifies.  A  merchant  and  a 


CITY  OF  NEWTON  V.  ATCHINSON.  553 

farmer  have  each  $5,000.  The  property  tax  on  each  is  the  same. 
Any  license  tax  imposed  on  the  former  increases  his  total  taxes  above 
the  amount  properly  chargeable  on  $5,000.  Yet  this  does  not  make 
the  license  tax  a  tax  on  property.  Indirectly  one's  property  may  be 
affected.  It  will  be  diminished  by  so  much  as  is  necessary  to  pay 
the  license  tax.  The  argument  of  counsel  carried  to  its  final  results 
makes  against  the  validity  of  all  license  taxes. 

Again,  graduation  in  the  matter  of  license  taxes  is  not  ouly  sup- 
ported by  the  authorities,  but  is  also  eminently  just.  A  license  tax 
which  is  the  same  on  a  merchant  doing  an  annual  business  of  $5,000 
as  upon  one  doing  a  like  business  of  $1,000,000,  strikes  anyone  as 
unjust,  and  as  distributing  the  public  burdens  very  unfairly.  It  may 
be  said  that  the  property  tax,  being  proportioned  to  the  amount  of 
property,  equalizes  burdens,  and  that  both,  engaged  in  the  same  busi- 
ness, should  pay  the  same  business  tax.  But  the  principles  that  jus- 
tify the  graduation  in  property,  apply  in  business  taxes.  The  larger 
the  business,  the  greater  the  protection  and  benefit  of  organized  so- 
ciety and  government.  And  if  graduation  is  permissible,  then  any 
standard  or  rule  of  graduation  may  be  adopted  which  is  reasonably 
fair  and  just.  And  the  fact  that  the  same  standard  is  adopted  which 
is  used  in  other  taxation  does  not  change  the  character  of  the  tax. 
Because  a  license  tax  is  proportioned  in  the  same  manner  as  a  prop- 
erty tax,  it  does  not  therefore  cease  to  be  a  license  tax.  And  that  is 
really  the  point  of  counsel's  argument.  This  license  tax  is  graduated 
as  property  taxes  are  graduated.  Therefore  it  is  a  property  tax.  The 
reverse  argument  would  be  just  as  logical,  and  demonstrate  as  forci- 
bly, that  all  property  taxes  are  simply  license  taxes.  The  rule  of 
graduation  adopted  in  this  case  may  not  be  absolutely  perfect.  The 
amount  of  stock  does  not  necessarily  determine  the  amount  of  busi- 
ness. And  yet  it  is  ordinarily  a  fair  criterion.  And  some  objection 
can  be  made  to  any  standard  suggested.  If  the  amount  of  sales  is 
named  it  can  be  objected  that  in  some  cases  profits  are  large  and  in 
others  small,  so  that  one  with  the  larger  income  may  pay  the  smaller 
business  tax.  If  profits  are  named,  then,  as  out  of  a  single  transac- 
tion or  two  large  profits  may  sometimes  be  made,  one  who  really  does 
very  little  business  may  be  charged  with  a  large  business  tax.  Be- 
sides, profits  are  so  largely  a  matter  of  the  merchant's  personal  knowl- 
edge and  of  his  alone,  that  it  would  be  difficult  to  practically  en- 
force such  a  standard  with  any  degree  of  accuracy.  It  is  hard 
enough  to  enforce  one  based  upon  the  average  amount  of  stock,  and 
yet  that  is  a  visible  fact.  No  standard  will  in  all  cases  be  found  ab- 
solutely perfect  and  securing  equal  and  exact  justice.  And  while  we 


554        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

think  the  amount  of  sales  would  be  a  fairer  standard,  yet  the  amount 
of  stock  cannot  be  pronounced  entirely  arbitrary  and  with  no  reason- 
able relation  to  the  fact  to  be  determined.  It  cannot  be  adjudged 
that  a  license  tax  graduated  thereby  is  by  reason  thereof  invalid. 

From  Cooley  on  Taxation,  164,  counsel  quote  the  following: 

'There  is  a  sense,  however,  in  which  duplicate  taxation  may  be 
understood — and  which,  we  think,  is  the  proper  sense — which  would 
render  it  wholly  inadmissible  under  any  constitution  requiring  equal- 
ity and  uniformity  in  taxation.  By  duplicate  taxation,  in  this  sense, 
is  understood  the  requirement  that  any  person  or  any  subject  of  tax- 
ation shall  directly  contribute  twice  to  the  same  burden,  while  other 
subjects  of  taxation  belonging  to  the  same  class  are  required  to  con- 
tribute but  once.  We  do  not  see,  for  instance,  how  a  tax  on  a  mer- 
chant's stock,  by  value,  could  be  supported,  when,  by  the  same  au- 
fhority  and  for  the  same  purpose,  the  same  stock  was  taxed  by  value 
as  a  part  of  his  property.  This  is  a  very  different  thing  from  one 
tax  upon  property  and  another  upon  the  business,  though  the  latter 
may  indirectly  reach  the  property ;  here  is  no  circumlocution,  no  ques- 
tion of  the  ultimate  effects,  but  a  tax  levied  twice  on  the  same  subject, 
only  under  a  different  name. 

We  do  not  understand  this  as  meaning  what  they  claim,  but  as  sim- 
ply holding  that  there  cannot  be  two  direct  taxes  upon  the  same  prop- 
erty, it  being  listed  and  described  under  different  names.  We  think 
that  the  latter  part  of  the  quotation  makes  the  author's  meaning 
clear.  See  also  the  note  to  page  139,  in  which  he  says : 

"A  law  which  should  make  no  discrimination  in  the  taxation  of 
business,  we  should  say  in  some  cases  would  produce  the  grossest  in- 
justice and  inequality,  and  it  may  be  seriously  questioned  whether 
the  requirement  of  uniformity  in  the  taxation  of  business  could  be 
understood  as  forbidding  the  classification  of  those  engaged  in  the 
business;  for  example,  underwriters,  by  the  business  done  or  pre- 
miums received ;  merchants,  by  the  capital  invested  or  the  sales  made, 
etc.,  and  the  apportionment  of  taxes  accordingly." 

See  also,  on  pages  384  and  385,  he  says: 

"The  methods  in  which  business  should  be  taxed  are  also  in  the 
legislative  discretion.  The  taxes  which  are  most  customary  are :  ( 1 ) 
On  the  privilege  of  carrying  on  the  business;  (2)  on  the  amount  of 
business  done;  (3)  on  the  gross  profits  of  the  business;  (4)  on  the 
net  profits,  or  profits  divided.  But  the  tax  may  be  measured  by 
other  standards  prescribed  for  the  purpose,  as  well  as  by  them/' 

In  Simmons  v.  The  State,  12  Mo.  268,  the  court  held  that  a  license 


OULD  &  CARRIXGTON  V.  RICHMOND.  555 

tax  on  lawyers  might  be  graduated.  (See  also  City  of  Burlington  v. 
Insurance  Co.,  31  Iowa  102;  Mares  v.  Erwin,  8  Hump.  290;  Osborne 
v.  Mayor,  &c.,  44  Ala.  498;  Ex.  Co.  v.  Mayor,  &c.,  49  Ala.  404;  Quid 
v.  City  of  Richmond,  23  Gratt.  464;  Commonwealth  v.  Moore,  25 
Gratt.  951;  Sacramento  v.  Crocker,  16  Cal.  119.)  This  last  was  * 
case  where  the  license  was  graduated  by  the  amount  of  monthly  sales, 
and  the  tax  was  sustained. 

We  have  prolonged  this  opinion  as  far  as  is  necessary.  Our  con- 
clusion is  that  the  tax  cannot  be  held  unconstitutional  and  invalid. 
Therefore  the  courts  may  not  interfere  to  restrain  its  collection.  If 
unwise  or  impolitic,  the  people  can  soon  put  a  stop  to  it  and  correct 
any  mistake  which  their  officers  may  make  in  this  respect. 

The  judgment  of  the  district  court  will  be  reversed,  and  the  case 
remanded  with  instructions  to  sustain  the  motion  to  dissolve  and 
vacate  the  order  of  injunction. 

HOETON,  C.  J.,  concurring. 


OULD  &  CARRINGTOX  V.  CITY  OF  RICHMOND. 

Supreme  Court  of  Appeals  of  Virginia.     June,  187S. 
23   Grattan  464- 

This  was  an  action  of  assumpsit  in  the  Circuit  Court  of  the  City 
of  Richmond,  instituted  in  November,  1871,  by  Ould  &  Carrington, 
lawyers,  against  the  City  of  Richmond.  The  object  of  the  suit  was 
to  establish  the  constitutionality  of  the  ordinance  of  the  city  council, 
imposing  a  tax  on  lawyers.  Issue  was  made  up  on  the  plea  of  "non 
assumpsit,"  and  the  whole  matter  of  law  and  fact  was  submitted  to 
the  decision  of  the  court. 

By  the  ordinance  imposing  taxes,  persons  following  various  em- 
ployments in  the  city  were  classified,  and  a  specified  tax  was  imposed 
on  each  class.  Among  these  were  lawyers  who  were  divided  into  six 

classes. 

In  1871  the  committee  of  finance  placed  the  plaintiffs,  as  lawyers,  in 
the  first  class,  and  classified  all  lawyers  practising  in  the  city  in  the 
respective  classes  mentioned  in  s.  5  of  the  ordinance;  that  being  the 
section  in  reference  to  lawyers.  In  doing  so  the  committee  had  no 


556        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

assessment  of  the  plaintiffs'  income  from  their  profession  before 
them;  nor  did  the  committee  ascertain,  or  attempt  to  ascertain,  their 
incomes  in  any  way;  but  formed  its  own  estimate,  without  evidence, 
of  the  reputation  and  standing  of  the  lawyers  practising  law  in  the 
city  of  Richmond,  including  the  plaintiffs,  and  their  supposed  capac- 
ity to  make  profits  in  that  way,  relatively  with  each  other,  and  clas- 
sified them  accordingly.  The  committee  made  no  report  to  the  coun- 
cil of  their  action  in  the  premises;  nor  did  the  council  ever  revise 
or  consider  it  in  any  way;  but  an  opportunity  was  offered  to  all  the 
lawyers  to  show,  each  for  himself,  that  they  had  been  taxed  too  high 
in  the  manner  provided  in  the  eleventh  section  of  the  ordinance;  and 
some  of  them  availed  themselves  of  that  opportunity;  and  among 
them  the  plaintiffs,  whose  tax  was  reduced  from  one  hundred  and 
fifty  to  ode  hundred  dollars;  but  in  doing  so  the  committee  acted 
without  evidence  of  the  relative  incomes  of  the  lawyers  embraced  in 
the  classification.  The  plaintiffs  having  paid  the  tax  under  protest, 
after  the  officer  had  levied  upon  their  property,  brought  this  action  to 
recover  it  back. 

Upon  the  hearing  of  the  case  there  was  a  judgment  for  the  plain- 
tiffs; and  the  city  of  Richmond  having  taken  an  exception  to  the 
opinion  and  judgment  of  the  court,  applied  to  this  court  for  a  super- 
sedeas;  which  was  awarded. 

ANDERSON,  J. — The  power  to  tax  rests  upon  necessity,  and  is 
inherent  in  every  sovereignty.  It  is  included  in  the  general  grant  of 
legislative  power;  and  reaches,  as  is  said  by  Mr.  Justice  Cooley,  "to 
every  trade  or  occupation;  to  every  object  of  industry,  use  or  enjoy- 
ment; to  every  species  of  possession."  "If  the  right  to  impose  the 
tax  exists,  it  is  a  right  which  in  its  nature  acknowledges  no  limits. 
It  may  be  carried  to  any  extent  in  the  State  or  Corporation  which 
imposes  it,  which  the  will  of  such  State  or  Corporation  may  pre- 
scribe." Cooley  on  Constitutional  Limitations,  ch.  14.  p.  479-482. 
And  in  the  language  of  Chief  J.  Marshall,  the  power  of  taxing  the 
people  and  their  property  is  essential  to  the  very  existence  of  gov- 
ernment, and  may  be  legitimately  exercised  upon  the  objects  to  which 
it  is  applicable,  to  the  utmost  extent  to  which  the  government  may 
choose  to  carry  it.  The  only  security  against  its  abuse  is  the  struc- 
ture of  the  government  itself.  The  influence  of  the  constituents 
over  their  representative  is  the  safeguard  against  its  abuse.  McCul- 
lough  v.  Maryland,  4  Wheat.  R.  316-428.  It  must  always  be  con- 
ceded that  the  proper  authority  to  determine  what  should,  and  what 
should  not  properly  bear  the  public  burden,  is  the  legislative  depart- 
ment of  the  State.  This  is  true  not  only  of  the  State  at  large,  but  it 


OULD  &  CARRIXGTON  V.  RICHMOND.  557 

is  true  also  in  respect  to  each  municipality,  or  political  division  of 
the  State.  But  these  municipal  corporations  have  only  such  powers 
as  the  Legislature  of  the  State  confers  on  them.  Cooley  488.  And 
their  powers  are  controlled  by  the  constitution  of  the  United  States, 
and  of  the  State.  The  restrictions  which  they  impose  on  the  legis- 
lative power  of  the  State  rest  equally  upon  all  the  instruments  of 
the  government  created  by  it.  Ib.  p.  198. 

The  powers  of  public  corporations  are  either  express,  implied,  or 
incidental.  And  except  as  to  such  powers  as  are  incidental  the  char- 
ter itself,  or  the  general  law  under  which  they  exist,  is  the  measure 
of  the  authority  to  be  exercised.  They  have  no  inherent  jurisdiction, 
like  the  State,  to  make  laws,  or  adopt  regulations  of  government. 
They  are  governments  of  enumerated  powers,  acting  by  a  delegated  au- 
thority :  so  that  while  the  State  Legislature  may  exercise  such  powers 
of  government,  within  the  description  of  legislative  power,  as  are  not 
expressly  or  impliedly  prohibited,  the  local  authorities  can  exercise 
those  only  which  are  expressly  or  impliedly  conferred,  and  such  as 
are  incidental,  subject  to  such  regulations  and  restrictions  as  are  an- 
nexed to  the  grant.  Cooley  192. 

With  these  general  principles  in  view,  we  will  now  enquire,  whether 
the  charter  of  the  City  of  Richmond  invests  the  municipality  with 
power  to  impose  the  tax  complained  of.  And  then  if  such  power  is 
conferred,  has  it  been  properly  exercised  in  this  case?  By  section  69 
of  the  charter,  sep.  acts  of  1869-70  p.  138,  it  is  provided  that,  "For 
the  execution  of  its  powers  and  duties  the  city  council  may  raise  an- 
nually, by  taxes  and  assessments  in  said  city,  such  sums  of  money  as 
they  shall  deem  necessary  to  defray  the  expenses  of  the  same,  and 
in  such  manner  as  they  shall  deem  expedient,  in  accordance  with 
the  laws  of  this  State  and  of  the  United  States/'  This  clause  con- 
fers the  general  power  of  taxation,  except  only  as  it  may  be  lim- 
ited by  the  laws  of  the  State  and  the  United  States;  and  include^ 
all  powers  and  subjects  of  taxation.  And  as  to  the  manner  of  laying 
the  tax,  the  council  is  invested  with  full  discretion.  And  they  are 
authorized  to  lay  a  tax  to  defray  the  expenses  of  the  city  to  an 
amount  which  they  may  deem  necessary.  It  seems  to  me  that  this 
language  is  broad  enough  to  embrace,  not  only  a  tax  on  real  and  per- 
sonal property,  but  every  other  description  of  tax  which  the  council 
might  deem  necessary  and  proper,  unless  its  meaning  is  limited  and 
circumscribed  by  what  follows. 

Whilst  a  lawyer's  license  authorizes  him  to  practice  law  in  any 
court  of  the  commonwealth,  and  it  is  not  within  the  power  of  any 


558        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

municipality  to  deprive  him  of  that  right,  or  to  take  away  his  license, 
it  is  a  civil  right  and  privilege,  to  which  are  attached  valuable  im- 
munities, and  pecuniary  advantages,  and  is  a  fair  subject  of  taxation 
by  the  State,  or  by  a  municipal  corporation  where  he  resides  and  en- 
joys the  privilege.  It  is  a  vested  civil  right;  yet  it  is  as  properly  a 
legitimate  subject  of  taxation  as  property  to  which  a  man  has  a 
vested  right.  I  cannot  perceive  that  there  would  not  be  as  much 
reason  for  saying  that  a  man's  property  is  not  taxable  because  he 
has  a  vested  right  to  it,  as  for  saying  that  a  lawyer's  license  is  not 
taxable,  because  he  has  a  vested  right  to  it. 

I  am  of  opinion,  therefore,  that  the  power  to  tax  a  lawyer's  license 
is  included  in  the  general  power  of  taxation  given  by  the  first  clause 
of  sec.  69 ;  and  that  it  is  not  taken  away  by  anything  that  follows. 

It  only  remains  to  enquire,  has  it  been  constitutionally  exercised 
in  this  case? 

By  an  ordinance  of  the  council,  the  lawyers  of  Richmond  were  di- 
vided into  six  classes;  and  the  individuals  of  each  class  were  as- 
sessed with  a  certain  amount  of  taxes;  and  a  committee  was  ap- 
pointed, charged  with  the  duty  of  assigning  them  to  the  class  to 
which  they  respectively  belonged.  It  is  contended  that  the  council 
could  not  delegate  this  power  to  a  committee. 

That  the  power  of  taxation  is  an  important»and  delicate  trust  con- 
fided to  the  council,  and  cannot  be  delegated  by  them  to  a  committee 
of  their  own  body,  or  to  any  other  agency,  is  unquestionably  true. 
It  is  a  legislative  power;  and  when  granted  to  a  municipality  it  can 
only  be  executed  by  itself,  or  by  such  agencies  or  officers  as  the  stat- 
ute has  pointed  out.  So  far  as  its  functions  are  legislative,  it  rests 
in  the  discretion  and  judgment  of  the  municipal  body  entrusted  with 
it;  and  that  body  cannot  refer  the  exercise  of  the  power  to  the  dis- 
cretion and  judgment  of  its  subordinates,  or  of  any  other  authority. 
Cooley,  p.  204,  205,  and  cases  cited. 

But  was  the  assignment  of  the  lawyers  to  their  respective  classes  a 
legislative  function?  The  enactment  that  the  lawyers  should  be  di- 
vided into  six  classes,  and  that  a  tax  of  so  much  should  be  levied 
upon  each  individual  of  a  class,  was  legislative,  and  was  performed 
by  the  council  itself.  Was  the  inquiry  as  to  which  class  the  lawyers 
should  be  respectively  assigned,  and  the  assignment  of  them  to  their 
respective  classes,  a  legislative  or  ministerial  act?  If  it  is  a  legisla- 
tive function,  the  commissioners  of  the  revenue,  under  a  delegated 
authority  from  the  general  assembly,  have  been  performing  yearly, 
without  question,  legislative  functions.  It  is  a  service  which  could 


OULD  &  CARRINGTON  V.  RICHMOND.  551) 

not  be  well  performed  by  the  legislative  body.  It  is  the  function  of 
a  commissioner,  in  order  to  the  execution  of  a  legislative  act,  and  is 
ministerial;  and  it  seems  to  me  that  it  was  competent  for  the  coun- 
cil to  require  the  service  to  be  performed  by  a  committee  of  their 
own  body,  as  well  as  by  a  commissioner,  or  the  general  assessor.  And 
it  was  not  more  necessary  that  the  action  of  said  committee  should 
be  reported  to  the  council,  and  have  its  confirmation,  than  that  sim- 
ilar duties  by  a  commissioner  of  the  revenue  should  be  reported  to 
and  confirmed  by  the  Legislature  of  the  State.  But  the  taxpayer 
should  be  provided  with  ample  remedies  for  redress,  if  he  has  been 
aggrieved  by  the  action  of  the  committee.  Whether  the  remedy  pro- 
vided in  this  case  by  the  ordinance  of  the  council  is  adequate  or  not, 
there  is  no  complaint  by  the  appellees  that  any  injustice  has  been 
shown  to  them;  and  it  is  a  question,  it  seems  to  me,  for  the  council 
and  their  constituents,  and  does  not  come  within  the  province  of 
the  courts. 

It  is  objected,  also,  that  the  mode  of  ascertaining  the  class  to  which 
the  lawyers  should  be  respectively  assigned,  was  uncertain  and  wholly 
inadequate  to  the  attainment  of  justice,  and  vitiates  the  whole  pro- 
ceeding. If  it  be  an  income  tax,  as  it  is  contended  it  was  designed 
to  be,  an  assessment  was  necessary  to  ascertain  what  was  the  income 
of  the  lawyer  to  be  taxed.  And  if  it  was  not  an  income  tax,  but  a 
license  tax,  that  is  a  tax  on  the  civil  right  or  privilege  conferred  by 
the  license,  the  tax  ought  to  be  proportioned,  as  nearly  as  practi- 
cable, to  the  value  of  that  right  and  privilege.  But,  exact  justice  and 
equality  are  not  attainable,  and  consequently  not  required.  Cooley 
on  Con.  Lim. ;  Slaughter's  Case,  13  Gratt.  767 ;  Eyre  v.  Jacob, 
sheriff,  14  Gratt.  422,  434,  435;  Gilkeson  v.  Frederick  Justices,  13 
Gratt.  577. 

I  do  not  think  it  was  intended  to  be  a  tax  on  income.  The  classi- 
fication of  lawyers  shows  this.  It  was  intended  to  be  a  tax  on  the 
civil  right  and  privilege.  And  it  is  true  that  the  tax  ought  to  be 
proportioned,  as  nearly  as  practicable,  as  I  have  said,  to  the  value 
of  the  privilege.  Justice  and  equality,  which  are  of  the  essence  of 
constitutional  taxation,  require  it.  The  act  of  the  council  requiring 
the  assignment  of  the  lawyers  into  six  classes,  and  the  gradation  of 
the  tax  upon  them,  according  to  the  class  to  which  they  were  respect- 
ively assigned,  shows  an  intended  approximation  to  equality;  and  if 
the  assignment  is  fair  and  judicious,  as  nearly  attains  it  as  is  perhaps 
practicable  in  a  license  tax.  It  is  true  that  the  principle  upon  which 
this  classification  is  made  by  the  5th  section  of  the  ordinance,  which 
is  in  relation  to  the  classification  of  lawyers,  doctors,  &c.,  is  not  in 


560        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

terms  expressed.  The  3d  section  in  relation  to  commission  mer- 
chants, brokers,  &c. ;  the  4th  section  in  relation  to  "sellers  by 
wholesale  or  retail  of  wine  or  spirituous  liquors;"  the  7th  section  in 
relation  to  "agents  or  sub-agents  of  any  insurance  company  or  office, 
whose  principal  office  shall  be  located  out  of  the  city;"  and  the  8th 
section  in  relation  to  "express  companies  and  telegraph  companies, 
having  a  place  of  business  in  the  city,"  all  adopt  the  method  of  clas- 
sification, as  in  the  5th  section;  nor  in  either  is  the  principle  ex- 
pressly stated  upon  which  the  classification  shall  be  made.  If  the 
tax  upon  lawyers  is  unconstitutional  and  void,  upon  this  ground,  it 
is  in  all  the  other  cases;  which  would  be  disastrous  to  the  financial 
condition  of  the  city;  and  a  question  involving  consequences  of  such 
moment  ought  to  be  well  considered  by  this  court,  before  it  declares 
those  ordinances  unconstitutional  and  void,  on  this  ground. 

The  llth  section  provides,  "that  the  committee  of  finance  shall 
place  each  person  and  firm,  employed  in  the  trade  or  business  re- 
ferred to  in  sections  3,  4,  5,  7,  and  8,  in  the  class  to  which  the  com- 
mittee shall  be  of  opinion  such  person  or  firm  properly  belongs,  look- 
ing to  all  the  circumstances  of  the  case."  Now  while  it  is  not  ex- 
pressed that  the  classification  shall  be  made  with  reference  to  the 
value  of  the  civil  right  or  privilege  conferred  by  the  license,  that,  it 
seems  to  me  is  the  obvious  design  and  object  of  the  classification, 
and  would  be  so  understood.  For  what  other  object  could  a  classi- 
fication have  been  made,  than  to  attain  justice  and  equality  as  near 
as  practicable  by  levying  a  tax  proportionate  to  the  value  of  the  priv- 
ilege to  the  party  taxed;  and  it  is  to  this  end  that  the  committee  is 
instructed  "to  look  to  all  the  circumstances  of  each  case."  It  might 
have  been  better  to  have  expressed  the  object  and  design  of  the  clas- 
sification as  a  guide  to  the  committee ;  but  it  seems  to  me  that  it  is 
manifest  without  being  expressed.  And  the  charter  expressly  invests 
the  council  with  full  discretion  to  raise  the  necessary  revenue,  by 
taxes  and  assessments,  "in  such  manner  as  they  shall  deem  expedient, 
in  accordance  with  the  laws  of  this  State  and  of  the  United  States;''* 
I  am  not  aware  that  these  provisions  of  the  ordinance  are  in  conflict' 
with  any  law  of  the  State  or  of  the  United  States.  That  the  discre- 
tion reposed  in  the  committee  may  be  abused  is  possible;  but  not 
more  likely,  I  think,  than  that  the  same  power  might  be  abused  by  a 
commissioner  of  the  revenue.  The  council  having  by  their  act  of" 
legislation,  required  the  lawyers  to  be  placed  in  six  different  classes, 
and  declared  what  tax  should  be  paid  by  the  individuals  composing 
each  class,  directed  one  of  its  most  important  standing  committees, 
the  committee  of  finance,  to  assign  them  respectively  to  such  class  as 


OULD  &  CABRINGTOX  V.  RICHMOND.  561 

they  should  properly  belong.  It  is  fair  to  presume,  that  this  com- 
mittee is  composed  of  intelligent,  discreet,  and  trust-worthy  gentle- 
men, residing  in  different  parts  of  the  city,  who  would  be  informed 
as  to  the  relative  standing  of  the  lawyers  in  the  city,  and  the  extent 
of  their  business,  from  their  own  observation,  and  from  reputation 
and  would  not  be  likely  to  err  greatly  in  their  determination  as  to 
which  class  they  should  be  respectively  assigned.  I  should  suppose 
that  there  is  not  an  intelligent  business  man  in  the  city  of  Eich- 
mond,  such  a  one  as  should  be  selected  as  a  councilman,  and  placed 
on  the  committee  of  finance,  who,  if  not  sufficiently  informed  as  to 
the  relative  practice  of  every  lawyer  in  the  city,  could  not  get  suffi- 
cient reliable  information  by  inquiry,  to  enable  him  to  determine, 
with  reasonable  accuracy,  to  which  of  the  six  classes  he  should  be 
assigned,  especially  after  a  free  interchange  of  views  with  the  other 
members  of  the  committee. 

It  is  true,  that  they  might  be  mistaken  in  individual  instances, 
which  I  should  think,  however,  would  rarely  be  the  case.  But,  as 
such  mistakes  might  occur,  a  remedy  was  provided  for  correcting 
them,  which  was  applied  in  this  case.  Xow,  whether  this  was  the 
best  mode  for  attaining  justice  in  the  classification  of  the  lawyers,  it 
is  not  for  me  or  the  court  to  say.  But  I  cannot  perceive  that  it  is 
obnoxious  to  the  objections  urged  against  it  in  the  argument;  or 
especially,  that  it  furnishes  ground  for  avoiding  the  tax  by  a  judg- 
ment of  the  court.  That  the  confidence  reposed  in  the  committee 
might  be  abused,  is  possible.  But  it  is  impossible  to  administer  gov- 
ernment without  reposing  confidence  in  public  agents.  A  reasonable 
confidence  in  human  agents  is  essential  to  society  and  to  the  con- 
duct of  human  affairs;  and  a  law  cannot  be  said  to  be  unconstitu- 
tional because  it  reposes  a  confidence  in  public  agents  which  may  be 
abused. 

As  before  said,  there  is  no  complaint  that  the  tax  imposed  upon 
the  appellees  in  this  case  is  unequal  and  unjust.  I  apprehend  the 
case  was  made  in  order  to  have  an  important  principle  as  to  the  right 
of  taxation  settled,  for  the  benefit  of  all  concerned,  as  well  as  the 
immediate  parties  to  this  proceeding.  It  was  believed  that  in  this 
assessment  there  was  an  encroachment  upon  the  constitutional  rights 
of  citizens;  and  this  proceeding  was  properly  instituted  to  test  the 
question.  From  the  best  consideration  I  have  been  able  to  give  the 
subject,  my  mind  has  been  brought  to  a  different  conclusion.  I  do 
not  think  that  the  city  council  have  exceeded  their  powers  in  the  im- 
position of  this  tax.  I  am,  therefore,  of  opinion,  to  reverse  the  judg- 
ment of  the  court  below. 
36 


562        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

MONCORE,  J.,  and  CHRISTIAN,  J.,  concurred  in  the  opinion  of 
Anderson,  J. 

STAPLES  AND  BOULDIN,  Js.,  dissented. 
JUDGMENT  REVERSED. 


IV.    REVOCATION  OF  TAX  LICENSE. 
METROPOLITAN  BOARD  OF  EXCISE  V.  BARRIE  ET  AL. 

Court  of  Appeals  of  New  York.    September,  1866. 
34  New  York,  657. 

WRIGHT,  J.  In  April,  1866,  the  legislature  passed  an  act  to  regu- 
late the  sale  of  intoxicating  liquors  within  the  "Metropolitan  Police 
District  of  the  State  of  New  York,"  excluding  the  county  of  West- 
chester.  (Laws  of  1866,  chap.  598.) The  act  de- 
clared "that  from  and  after  the  first  day  of  May,  1866,  no  person 
or  persons  shall,  within  the  said  Metropolitan  Police  District,  ex- 
clusive of  the  county  of  Westchester,  publicly  keep  or  sell,  give  away 
or  dispose  of  any  strong  or  spirituous  liquors,  wines,  ale  or  beer,  in 
quantities  less  than  five  gallons  at  a  time,  unless  he  or  they  may  be 
licensed  pursuant  to  the  provisions  of  this  act,  and  may  be  permitted 
by  it."  (§3.) 

On  the  third  and  sixth  days  of  May,  and  after  the  act  took  effect, 
the  defendants,  Barrie  and  Currier,  without  being  licensed  pursuant 
to  its  provisions,  publicly  sold,  at  their  respective  places  of  business 
in  Broadway,  in  the  city  of  New  York,  to  various  persons,  strong 
and  spirituous  liquors,  wines,  ale  and  beer,  in  quantities  less  than 
five  gallons  at  a  time,  to  be  and  which  liquors  were  drank  on  their 
premises;  and  the  persons  to  whom  such  sales  were  severally  made 
were  not  travelers,  and  were  known  to  the  defendants  not  to  be  trav- 
elers. Both  the  defendants  had,  in  1865,  under  the  excise  act  of 
1857  (Laws  of  1857,  ch.  628),  received  from  the  then  commission- 
ers of  excise  for  the  city  and  county  of  New  York,  a  license  to  sell 
strong  and  spirituous  liquors  and  wines,  to  be  drank  in  their  houses 
and  on  their  premises,  which  licenses,  by  their  terms  were  to  con- 
tinue in  force  till  fifty  days  after  the  third  Tuesday  in  May,  1866, 
and  at  the  time  of  the  sales  in  question  had  not  been  revoked  by 
order  of  any  court.  The  board  of  excise  claimed  to  recover  from 
these  parties,  respectively,  the  penalty  of  fifty  dollars  for  a  violation 


METROPOLITAN  BOARD  V.  BARRIE.  563 

of  the  provisions  of  the  act  of  April  14,  1866;  and  the  questions 
submitted  were:  1st.  Were  they  liable  to  pay  to  the  plaintiffs,  by 
reason  of  such  sales  on  the  3d  and  6th  of  May,  1866,  such  penalty? 
and,  2d.  Is  the  act  a  valid  and  constitutional  law? 

A  law  prohibiting  the  indiscriminate  traffic  in  intoxicating  liquors, 
and  placing  the  trade  under  public  regulation  to  prevent  abuse  in 
their  sale  and  use,  violates  no  constitutional  restraints.  Is  it  not  an 
absurd  proposition,  that  such  a  law,  by  its  own  mere  force,  deprives 
any  person  of  his  liberty  or  property,  within  the  meaning  of  the  Con- 
stitution, or  that  it  infringes  upon  either  of  these  secured  private 
rights  ? 

Yet  this  is  the  only  ground  its  violators  can  occupy  to  raise  any 
question  as  to  its  validity.  They  are  restrained  of  no  liberty  except 
that  of  violating  the  law  by  engaging  in  a  forbidden  traffic ;  and  the 
assumption  is  not  even  plausible,  that  the  act  works  a  deprivation  of 
a  property  to  anyone,  within  the  meaning  of  the  constitutional  re- 
strictions upon  legislative  authority.  It,  in  terms,  it  is  true,  revokes 
licenses  granted  under  the  act  of  1857,  but  that  is  no  encroachment 
upon  any  right  secured  to  the  citizen  as  inviolable  by  the  funda- 
mental law.  These  licenses  to  sell  liquors  are  not  contracts  between 
the  State  and  the  persons  licensed,  giving  the  latter  vested  rights, 
protected  on  general  principles  and  by  the  Constitution  of  the  United 
States,  against  subsequent  legislation;  nor  are  they  property  in  any 
legal  or  constitutional  sense.  They  have  neither  the  qualities  of  a 
contract  nor  of  property,  but  are  merely  temporary  permits  to  do 
what  otherwise  would  be  an  offense  against  a  general  law.  They 
form  a  portion  of  the  internal  police  system  of  the  State ;  are  issued 
in  the  exercise  of  its  police  powers,  and  are  subject  to  the  direction 
of  the  State  government,  which  may  modify,  revoke  or  continue 
them,  as  it  may  deem  fit.  If  the  act  of  1857  had  declared  that 
licenses  under  it  should  be  irrevocable  (which  it  does  not,  but  by  its 
very  terms  they  are  revocable),  the  legislatures  of  subsequent  years 
would  not  have  been  bound  by  the  declaration.  The  necessary  power 
of  the  legislature  over  all  subjects  of  internal  police  being  a  part  of 
the  general  grant  of  legislative  power  given  by  the  Constitution, 
cannot  be  sold,  given  away  or  relinquished.  Irrevocable  grants  of 
property  and  franchises  may  be  made,  if  they  do  not  impair  the 
supreme  authority  to  make  laws  for  the  right  government  of  the 
State;  but  no  one  legislature  can  curtail  the  power  of  its  successors 
to  make  such  laws  as  they  may  deem  proper  in  matters  of  police. 
(Alger  v.  Weston,  14  Johns.  231;  People  v.  Morris,  13  Wend.  329; 


564        TAXATION  OF  BUSINESS  AND  PRIVILEGE. 

State  v.  Holmes,  38  New  Hamp.  225;  Colder  v.  Kirby,  5  Gray, 
597;  Hun  v.  State,-!  Ohio,  15;  Wynehamer  v.  The  People,  3  Kern, 
378;  License  Cases,  5  How.  U.  S.  R.  504;  Butler  v.  Pennsylvania, 
10  How.  416 ;  Coates  v.  TVte  Mayor,  7  Cow.,  585 ;  2  Parsons  on  Con- 
tracts, 538;  3  id.  5th  ed.  556.) 

Errors  or  mistakes  in  legislation  are  not  to  be  referred  to  the  judi- 
ciary for  correction,  or  its  aid  invoked,  by  men  chafing  under  the 
restraints  of  particular  statutes,  to  nullify  the  legislative  power.  The 
judgments  should  be  affirmed. 

Judgments  affirmed. 

•          ••••••••• 

Such  a  rule  would  not  apply  to  a  license  to  practice  a  profession  such  as 
law,  which  once  granted  may  not  be  taken  away  without  due  process  of 
law,  generally  a  hearing  before  a  court.  Exp.  Garland,  4  Wallace  (U.  S.) 
334.  But  the  legislature  may  impose  new  conditions  on  one  engaged  in  a 
profession  and  provide  that  one  who  does  not  fulfill  them  shall  not  practice 
such  profession,  as  where  it  provides  that  one  convicted  of  a  felony  shall  not 
practice  medicine.  Hawker  v.  New  York,  170  U.  S.  189;  Dent  v.  West 
Virginia,  129  U.  S.  114;  Gray  v.  Connecticut,  159  U.  S.  74. 


PEOPLE  EX  EEL.  PRESMEYER    V.    BOARD  OF  COMMIS- 
SIONERS. 

Court  of  Appeals  of  New  York.    November,  187%. 
59  New  York,  92. 

GROVER,  J.    Section  8  of  chap.  549,  Laws  of  1873   (page  859) 

authorizes  the  board  of  excise,  upon  their  own  motion, 

whenever  they  suspect  any  person  having  a  license  for  the  sale  of 
intoxicating  liquors  of  having  violated  any  of  the  provisions  of  the 
acts  in  question,  to  summon  such  person  before  them  to  inquire  into 
the  fact  of  such  violation,  and  if  they  find  him  guilty,  cancel  his 
license;  and  upon  the  complaint  of  any  resident  of  the  city,  etc.. 
that  such  person  has  violated  any  such  provision,  commands  them  to 
summon  such  party  and  make  inquiry  as  to  the  fact  complained  of. 
Complaint  was  made  to  the  board,  by  a  sergeant  of  police,  of  Brook- 
lyn, that  the  appellant,  in  substance,  kept  his  saloon  open  on  Sun- 
day for  the  sale  of  and  sold  beer  therein.  Though  this  is  not  for- 
mally stated  in  the  complaint,  yet  the  facts  stated  therein  show,  if 
true,  that  this  was  done  there  at  that  time.  That  keeping  open  the 


PEOPLE  V.  BOARD  OF  COMMISSIONERS.  565 

saloon  on  that  day  for  the  public  sale  of  beer  for  a  beverage  was  a 
violation  of  the  statute,  requires  no  argument. 

The  counsel insists  that  section  8  is  unconstitu- 
tional, for  the  reason  that  it  authorizes  the  conviction  of  a  party  of 
a  crime  without  a  trial  by  jury.  But  it  authorizes  nothing  more 
than  an  inquiry  into  and  determination  of  the  question  whether 
the  party  licensed  continues  to  be  a  suitable  and  proper  person  to 
sell  intoxicating  liquors,  the  statute  itself  determining  that  a  violator 
of  the  excise  laws,  while  holding  a  license,  is  not  such  a  person. 
That  the  power  to  license  the  sale  of  intoxicating  liquors  and  to 
cancel  such  license  when  granted  is  vested  in  the  legislature,  has 
been  determined  by  this  court.  (Metropolitan  Board  of  Excise  v. 
Barrie,  34  N.  Y.  657.)  The  mode  and  manner  in  which  this  shall 
be  done  rests  in  the  discretion  of  that  body. 

The  order  of  the  general  term  affirming  the  order  of  the  Special 
Term  denying  a  writ  of  prohibition,  must  be  affirmed  with  costs. 

All  concur. 

Order  affirmed. 


CHAPTER  XIV. 
TAXATION  BY  SPECIAL  ASSESSMENTS. 

j  ~  I.    LEGISLATIVE  DISCRETION. 

LITCHFIELD  V.  VERNON. 

Court  of  Appeals  of  New  York.    September,  1869. 
41  New  York  123. 

GROVER,  J.  The  question  whether  the  act  of  1859,  chap.  484  of 
Laws,  page  484,  is  unconstitutional  and  void,  depends  upon  the  in- 
quiry whether  the .  assessments  thereby  authorized  are  made  in  the 
exercise  of  the  taxing  power  of  the  State  or  of  that  of  eminent  do- 
main. If  the  former,  the  counsel  for  the  appellant  concedes  them  to 
be  valid.  See  People  v.  Mayor  of  Brooklyn  (4  Comst.  419) ;  The 
Sun  Insurance  Company  v.  The  Mayor,  etc.  (N.  Y.  4  Seld.  241) ; 
Town  of  Guilford  v.  The  Board  of  Supervisors,  Chenango  County, 
(3  Kern.  143.)  If  the  latter,  it  is  entirely  clear  that  the  act  is  void. 
An  examination  of  the  case  shows  that,  at  the  time  of  the  passage 
of  the  act,  the  Long  Island  Railroad  Company  had  the  right* of  way 
in  a  tunnel  constructed  in  Atlantic  street,  Brooklyn,  for  a  railroad 
operated  by  steam,  and  were  operating  their  road  thereon;  that  the 
legislature  deemed  it  expedient  to  close  the  tunnel,  grade  the  street, 
lay  a  track  upon  the  surface  to  be  operated  by  horse  power,  etc.,  and 
to  authorize  the  making  of  a  contract  with  the  railroad  company  for 
doing  the  work  and  effecting  the  changes  for  a  sum  not  exceeding 
$125,000.  To  carry  into  effect  this  design,  the  act  in  question  was 
passed,  authorizing  the  commissioners,  whose  appointment  was  pro- 
vided for  in  the  act,  to  make  the  contract,  and  to  make  an  assess- 
ment for  the  payment  of  the  contract  price,  together  with  the  inci- 
dental expenses  upon  the  lands  and  premises  situate  in  the  district 
specified  in  the  act.  This  local  assessment  for  those  purposes,  it  is 
apparent,  was  based  upon  the  ground  that  the  territory  subjected 
thereto  would  be  benefited  by  the  work  and  change  in  question. 
Whether  so  benefited  or  not,  and  whether  the  assessment  of  the  ex- 
pense should  for  this,  or  any  other  reason,  be  made  upon  the  dis- 
trict, the  legislature  was  the  exclusive  judge.  The  Constitution  has 

566 


LITCHFIELD  V.  VERXON.  567 

imposed  no  restriction  upon  their  power  in  this  respect.  See  cases 
cited,  supra.  The  counsel  for  the  appellant  concedes  that  this  is  true 
so  far  as  closing  the  tunnel  and  grading  the  street  are  concerned, 
but  insists  that  compensating  the  company  for  abandoning  the  use 
of  steam  and  substituting  therefor  horse  power,  does  not  come  within 
the  like  principles.  I  am  unable  to  see  upon  what  grounds  the  power 
of  the  legislature  can  be  limited  in  respect  to  the  latter,  consistently 
with  the  doctrine  held  by  this  court,  in  The  Town  of  Guilford  v.  The 
Board  of  Supervisors,  supra.  In  that  case,  it  was  held,  that  the 
legislature  had  the  power  to  impose  a  tax  upon  the  inhabitants  of 
the  town  to  pay  a  claim  that  had  no  legal  validity,  and  that  could 
in  no  way  be  enforced  against  the  town.  In  other  words,  that  it  was 
within  the  power  of  the  legislature  to  impose  a  tax  upon  a  locality 
for  any  purpose  deemed  proper,  and  that  its  power  in  this  respect  is 
not  restricted  by  the  constitution  of  the  State.  The  other  cases  show 
that  when  the  legislature  deem  it  proper  to  impose  the  burden  upon 
any  specified  locality  they  have  the  power  of  so  doing.  The  act  of 
1859  must,  therefore,  be  held  constitutional  and  valid.  The  act  of 
1860,  chapter  100,  among  other  things,  authorizes  an  assignment  of 
the  assessments  to  the  railroad  company,  in  satisfaction  of  the  money 
to  be  paid  for  doing  the  work,  and  making  the  change  in  operating 
the  road  from  steam  to  horse  power.  To  this  I  see  no  objection.  It 
in  no  ways  affects  or  changes  the  rights  of  the  owners  of  the  lands 
assessed.  Whether  the  money,  when  collected  upon  the  assessments, 
is  paid  into  the  city  treasury  and  then  paid  to  the  company,  or 
paid  to  the  company  directly,  is  immaterial  to  them.  Whether  the 
act  of  1863,  chapter  298,  relating  to  this  assessment  is  constitu- 
tional, depends  upon  the  question  whether  the  owners  of  the  lands 
upon  which  the  assessments  were  made  were  personally  liable  for  the 
payment,  or  whether  the  lands  only  were  liable  therefor.  Section  7 
of  the  act  of  1859,  among  other  things,  provides,  that  the  collector 
shall  levy  and  collect  the  amount  of  the  several  assessments  therein 
mentioned  in  the  same  manner  as  the  county  tax  is  levied  and  col- 
lected; and  the  same  measures  taken  to  enforce  the  collection  there- 
of, as  are  provided  by  law  in  regard  to  the  county  tax,  and  in  addi- 
tion the  collector  is  clothed  with  the  same  powers  as  the  collectors 
in  the  city  of  Brooklyn.  This  places  the  assessments  in  question 
upon  the  same  footing  as  county  taxes.  That  the  latter,  when  as- 
sessed upon  residents,  in  respect  of  real  or  personal  property,  creates 
a  personal  liability  for  payment,  there  can  be  no  doubt.  The  stat- 
utes point  out  the  mode  of  enforcing  this  liability  in  a  way  more 
efficacious  than  that  provided  by  law  for  other  liabilities.  Taxes  as- 


568  TAXATION  BY  SPECIAL  ASSESSMENTS. 

sessed  upon  non-resident  real  estate  impose  no  personal  liability  upon 
the  owner.  In  respect  to  these,  the  collector  has  no  duty  except  to 
receive  payment  if  offered,  and  if  not,  to  make  return  to  the  proper 
officer.  This  being  so,  the  legislature  had  the  power  to  provide  such 
remedy  to  enforce  the  liability,  whether  by  action  or  otherwise,  as  it 
deemed  proper.  The  rule  is  well  settled,  that  the  remedy  to  enforce 
rights  is,  at  all  times,  within  the  control  of  the  legislative  power, 
with  the  exception  that  it  cannot  deprive  a  party  of  all  efficient  rem- 
edies to  enforce  rights  based  upon  contract,  as  that  would  in  effect 
impair  or  destroy  the  obligation  of  the  contract,  which  is  prohibited 
by  the  federal  constitution.  But  new  and  additional  remedies  may 
be  provided,  as  in  the  present  case.  It  is  unnecessan*,  in  the  pres- 
ent case,  to  determine  whether  section  4  of  the  act  of  1865,  author- 
izing the  company  to  appoint  a  collector,  is  in  conflict  with  section 
2,  article  10,  of  the  Constitution;  as  the  plaintiff,  in  bringing  the 
action,  is  not  exercising  the  functions  of  any  officer,  but  is  acting  as 
a  suitor  only.  The  legislature,  having  power  to  authorize  an  action 
for  the  collection  of  the  assessment,  had  also  power  to  provide  who 
should  be  plaintiff  therein.  This  brings  us  to  the  only  remaining 
question  in  the  case;  and  that  is  whether  there  is  any  competent  evi- 
dence authorizing  a  finding  that  a  majority  of  the  owners  of  land, 
within  the  territory  made  subject  to  assessment,  made  application  to 
the  common  council,  requesting  them  to  make  application  to  the 
Supreme  Court  for  the  appointment  of  three  commissioners,  as  pro- 
vided by  the  first  section  of  the  act  of  1859.  That  section  provides 
that  the  common  council  of  the  city  of  Brooklyn  shall,  upon  petition 
or  application  of  the  majority  of  the  owners  of  the  land,  at  the  time 
of  the  passage  of  the  act,  in  the  district  proposed  to  be  assessed 
thereby,  make  application  to  the  Supreme  Court,  at  Special  Term, 
etc.  The  act  itself  is  wholly  silent  as  to  how  this  essential  fact 
shall  be  proved.  The  act  to  consolidate  the  cities  of  Brooklyn,  etc., 
referred  to  in  this  section,  for  the  mode  of  proceeding  in  procuring 
the  appointment  of  commissioners,  contains  nothing  applicable  to 
the  present  case  in  this  respect.  The  right  of  the  common  council 
to  apply  for  the  appointment  of  the  commissioners,  lies  at  the  foun- 
dation of  the  whole  proceeding.  Unless  this  right  existed,  all  the 
proceedings  in  appointing  the  commissioners,  and  subsequent  thereto, 
are  void.  This  right  depends  upon  the  question  whether  a  majority 
of  the  land  owners  petitioned  the  common  council  to  proceed  under 
the  act.  In  the  absence  of  such  petition,  the  common  council  had 
no  authority  in  the  premises,  and  nothing  could  be  done  under  the 
act.  The  act  does  not  provide  for  the  determination  of  this  fact  by 


HAMMETT  V.  PHILADELPHIA.  569 

the  common  council  nor  by  the  Special  Term  upon  the  presentation 
of  the  petition  for  the  appointment  of  the  commissioners.  The 
plaintiff  seeks  to  show  that  the  defendant  became  liable  to  pay  the 
assessment.  It  was  incumbent  upon  him  to  show  the  existence  of 
the  facts  creating  the  liability.  The  act  being  silent  as  to  what 
should  be  deemed  proof  of  the  fact  that  a  majority  of  the  land  own- 
ers petitioned  the  council,  the  plaintiff  was  bound  to  prove  such  fact 
by  competent  common  law  evidence.  This  could  be  done  by  proof, 
showing  who  were  the  owners  of  the  land,  at  the  time  of  the  passage 
of  the  act,  and  that  a  majority  of  such  persons  petitioned  the  com- 
mon council,  as  required  by  the  first  section  of  the  act.  Neither  the 
application  of  the  council  to  the  court,  nor  the  affidavit  of  the  mayor, 
accompanying  such  application,  was  evidence  of  this  fact  against  the 
defendant.  (Sharp  v.  Speir,  4  Hill  76,  and  cases  cited.)  There 
was  no  competent  evidence  of  this  fact  given  upon  the  trial,  and 
the  exception  to  the  findings  of  this  fact  by  the  judge  was  well  taken. 
Upon  this  ground  the  judgment  should  be  reversed,  and  a  new  trial 
ordered. 

All  the  judges  concurred  for  reversal,  except  Hunt,  Ch.  J.,  and 
Mason,  J.,  who  were  for  affirmance,  and  Lott,  J.,  who  did  not  vote. 

Judgment  reversed,  and  a  new  trial  ordered. 

For  the  power  of  the  legislature  in  New  York  to  apportion  taxation  in 
accordance  with  its  ideas  of  benefit  see  People  v.  Mayor,  4  N.  Y.  419,  supra. 


HAMMETT  V.  PHILADELPHIA. 

Supreme  Court  of  Pennsylvania.     March,  1869. 
65  Pennsylvania  State, 


This  was  a  scire  facias  sur  municipal  claim  by  the  City  of  Phila- 
delphia, to  the  use  of  Charles  E.  Jenkins  and  Jonathan  Taylor, 
against  Barnabas  Hammett,  issued  July  18th,  1868. 

On  the  24th  of  October,  1868,  judgment  was  entered  for  the 
plaintiff,  for  want  of  a  sufficient  affidavit  of  defence,  and  damages 
were  assessed  at  $4462.14.  The  defendant  took  a  writ  of  error  and 
assigned  for  error,  that  the  court  erred. 

4.  In  not  deciding  that  the  ordinance  and  Act  of  Assembly  were 
respectively  null  and  void  by  reason  of  their  being  in  violation  of 
the  constitution  of  the  state,  and  of  their  being  a  delegation  and  ex- 


570  TAXATION  BY  SPECIAL  ASSESSMENTS. 

ercise  of  a  power  to  impose  upon  a  few  individuals  a  heavy  expendi- 
ture, which  should  be  borne  by  the  public  at  large. 

SHARSWOOD,  J.  It  may  be  considered  as  a  point  fully  settled  and 
at  rest  in  this  state,  that  the  legislature  have  the  constitutional 
right  to  confer  upon  municipal  corporations  the  power  of  assessing 
the  cost  of  local  improvements  upon  the  properties  benefited.  It  is 
a  species  of  taxation;  not  the  taking  of  private  property  by  virtue  of 
eminent  domain. 

There  is,  indeed,  no  clause  in  the  Constitution  of  Pennsylvania 
which  restricts  the  power  of  taxation  in  the  legislature  as  is  to  be 
found  in  the  constitutions  of  many  of  our  sister  states.  Yet  it  must 
be  confessed  that  there  are  necessary  limits  to  it  in  the  very  nature 
of  the  subject.  It  is  very  clear  that  the  taxing  power  cannot  be  used 
in  violation  of  provisions  in  the  Bill  of  Eights,  everything  in  which 
is  "excepted  out  of  the  general  powers  of  government,  and  shall  for- 
ever remain  inviolate."  There  is  no  case  to  be  found  in  this  state, 
nor,  as  I  believe  after  a  very  thorough  research,  in  any  other — with 
limitations  in  the  Constitution  or  without  them — in  which  it  has 
been  held  that  the  legislature,  by  virtue  merely  of  its  general  powers, 
can  levy,  or  authorize  a  municipality  to  levy,  a  local  tax  for  general 
purposes -. 

It  may  be  shown  logically,  and  that  without  difficulty,  that  such  a 
doctrine  lands  us  in  this  absurd  proposition:  That  the  whole  ex- 
penses of  government,  general  and  local,  may  be  laid  upon  the  shoul- 
ders of  one  man,  if  one  could  be  found  able  to  bear  such  a  burden. 
A  conclusion  so  monstrous  shows  that  the  premises  must  be  wrong. 
Such  a  measure  would  not  be  taxation,  but  confiscation. 

It  remains  to  apply  these  principles  to  the  case  presented  to  us 
upon  this  record.  The  original  paving  of  a  street  brings  the  prop- 
erty bounding  upon  it  into  the  market  as  building  lots.  Before  that, 
it  is  a  road,  not  a  street.  It  is  therefore  a  local  improvement,  with 
benefits  almost  exclusively  peculiar  to  the  adjoining  properties.  Such 
a  case  is  clearly  within  the  principle  of  assessing  the  cost  on  the  lots 
lying  upon  it.  Perhaps  no  fairer  rule  can  be  adopted  than  the  pro- 
portion of  feet  front,  although  there  must  be  some  inequalities  if  the 
lots  differ  in  situation  and  depth.  Appraising  their  market  values, 
and  fixing  the  proportion  according  to  these,  is  a  plan  open  to  favor- 
itism or  corruption,  and  other  objections.  No  system  of  taxation 
which  the  wit  of  man  ever  devised  has  been  found  perfectly  equal. 


HAMMETT  V.  PHILADELPHIA.  571 

But  when  a  street  is  once  opened  and  paved,  thus  assimilated  with 
the  rest  of  the  city  and  made  a  part  of  it,  all  the  particular  benefits 
to  the  locality  derived  from  the  improvements  have  been  received 
and  enjoyed.  Kepairing  streets  is  as  much  a  part  of  the  ordinary 
duties  of  the  municipality — for  the  general  good — as  cleaning,  watch- 
ing and  lighting.  It  would  lead  to  monstrous  injustice  and  inequal- 
ity should  such  general  expenses  be  provided  for  by  local  assess- 
ments. 

This  case  indeed  is  still  clearer  than  that  which  I  have  put  of  a 
simple  repairing.  Broad  street  in  front  of  the  lot  of  the  plaintiff  in 
error,-  was  paved  only  a  few  years  ago  in  the  ordinary  way  in  which 
all  the  other  streets  of  the  city  have  been  paved — with  cobble  stones 
— and  whatever  advantage  there  was  in  his  owning  property  on  so 
wide  and  handsome  a  street  was  paid  for  by  him  in  the  increased 
cost  assessed  upon  him  for  the  paving.  Without  any  pretence  that  it 
has  been  worn  out  and  required  to  be  replaced  by  another,  it  was 
torn  up,  and  a  new  and  very  expensive  wooden  pavement  substituted. 
The  plaintiff  in  error  did  not  remain  silent.  He  protested  and  re- 
monstrated, and  filed  a  bill  in  equity  to  restrain  the  work  before  it 
began.  The  city  and  their  contractors  can  plead  no  equity  against 
him.  It  is  said  that  it  was  all  for  his  interest.  But  whether  he  was 
mistaken  or  not  as  to  his  own  interest,  he  was  the  judge  of  that,  not 
this  court.  The  case  is  not  to  be  decided  upon  any  particular  results 
in  this  instance,  but  on  general  principles  which  can  work  with  safety 
and  advantage  to  the  public  in  all  other  cases.  Mr.  Hammett  may 
have  been  specially  benefited;  though  we  have  no  evidence  of  that  on 
this  record,  and  we  have  no  right  to  consider  evidence  derived  from 
any  other  source,  but  the  next  experiment  may  be  unsuccessful  and 

ruinous The  object  of  this  improvement  is  not  to 

bring  or  keep  Broad  street  as  all  the  other  streets  within  the  built 
up  portions  of  the  city  are  kept,  for  the  advantage  and  comfort  of 
those  who  live  upon  it,  and  for  ordinary  business  and  travel,  but  to 
make  a  great  public  drive — a  pleasure  ground — along  which  elegant 
equipages  may  disport  of  an  afternoon.  We  need  look  no  further 
than  the  preamble  of  the  act  authorizing  the  improvement  of  Broad 
street,  passed  March  23d,  1866  (Pamph.  L.  299),  for  evidence  thaf 
is  for  the  general  public  good,  not  for  mere  peculiar  local  benefit.  It 
states  it  to  be  "for  the  uses  and  purposes  of  the  public,  and  the 
benefits  and  advantages  which  will  enure  to  them  by  making  and  for- 
ever maintaining  Broad  street,  in  the  city  of  Philadelphia,  for  its 
entire  length  as  the  same  is  now  opened,  or  may  hereafter  be  opened, 
the  principal  avenue  of  said  city."  Thus  we  have  special  taxation 


572  TAXATION  BY  SPECIAL  ASSESSMENTS. 

authorized,  for  an  object  avowed  on  the  fact  of  the  act  to  be  gen- 
eral and  not  local,  which  relieves  the  case  of  all  difficulty  as  to  the 
fact.  We  have  only  to  advance  the  project  a  few  steps  further  to 
see  how  preposterous  is  the  idea  of  paying  for  such  an  improvement 
by  assessments.  In  the  natural  course  of  things,  we  may  expect  that 
it  will  be  proposed  to  adorn  this  principal  avenue  with  monuments, 
statuary  and  fountains.  Will  their  cost  be  provided  for  in  the  same 
way?  How  much  does  this  plan  differ  from  a  proposition  to  erect 
new  public  buildings  on  Independence  Square,  and  assess  the  cost 
on  lots  situated  on  the  neighboring  streets?  On  the  same  principle 
lots  on  the  public  squares  could  be  assessed  to  pay  for  any  new 
project  to  beautify  and  adorn  them,  no  matter  how  great  the  ex- 
pense. It  might  be  argued  with  equal  plausibility  that  their  value 
was  increased  by  the  improvement.  We  must  say  at  some  time  to 
this  tide  of  special  taxation,  thus  far  thou  shalt  go  and  no  further. 
To  our  own  decisions,  as  far  as  they  have  gone,  we  mean  to  adhere, 
but  we  are  now  asked  to  take  a  step  much  in  advance  of  them.  This 
we  would  not  be  justified  by  the  principles  of  the  constitution  in 
doing. 

Local  assessments  can  only  be  constitutional  when  imposed  to  pay 
for  local  improvements,  clearly  conferring  special  benefits  on  the 
properties  assessed,  and  to  the  extent  of  those  benefits.  They  cannot 
be  so  imposed  when  the  improvement  is  either  expressed,  or  appears 
to  be  for  general  public  benefit. 

There  have  been  several  other  points  raised  and  discussed  on  this 
record,  but  we  are  not  obliged  to  consider  them,  and  as  the  conclusion 
at  which  we  have  arrived  that  the  Act  of  Assembly  of  March  23d, 
1866,  so  far  as  it  authorizes  the  Councils  of  the  city  of  Philadelphia 
"to  enact  such  ordinances  or  resolutions  with  such  conditions  or  stip- 
ulations as  may  require  the  cost  of  said  improvements  to  be  paid  for 
by  the  owners  of  property  abutting  on  said  street,"  is  unconstitu- 
tional and  void,  disposes  of  the  whole  case,  it  is  unnecessary  to  dis- 
cuss any  other. 

Judgment  reversed. 

READ,  J.,  dissenting. 

The  rule  of  the  principal  case  as  to  the  impropriety  of  levying  special 
assessments  for  repaying  streets  is  not  usually  adopted.  See  Cooley,  Taxa- 
tion, 3rd  edition,  p.  613. 


STATE  V.  CITY  OF  NEWARK.  573 


STATE  V.  CITY  OF  NEWARK. 

New  Jersey  Supreme  Court.    June,  1858. 
3  Dutclier  186. 

This  certiorari  was  brought  to  set  aside  an  assessment,  made  on 
property  of  the  New  Jersey  Railroad  and  Transportation  Company, 
for  widening  Market  street  in  the  city  of  Newark. 

THE  CHIEF  JUSTICE.  By  the  act  to  incorporate  the  city  of  New- 
ark passed  the  29th  day  of  February,  1836,  the  common  council  are 
authorized  to  cause  a  just  and  equitable  assessment  of  the  damages 
and  expenses  incident  to  the  opening  and  widening  of  streets  in  said 
city  to  be  made  among  the  owners  and  occupants  of  all  the  houses 
and  lots  intended  to  be  benefited  thereby,  in  proportion  to  the  ad- 
vantages each  shall  be  deemed  to  acquire.  Elmer's  Dig.  656,  §  34. 
By  a  supplement  to  the  charter,  approved  March  16th,  185-4,  Pamph. 
Laws  395,  §  6,  it  is  enacted,  "that  whenever  any  street,  or  part  of  a 
street,  in  the  city  of  Newark,  occupied  or  used  by  the  track  of  any 
railroad  company,  shall  require  to  be  altered  or  widened  for  the  con- 
venience of  public  travel,  and  proceedings  for  the  altering  and  widen- 
ing the  same  shall  have  been  taken  under  the  act  to  which  this  is  a 
supplement,  it  shall  be  lawful  for  the  commissioners,  whose  duty  it 
may  be  to  make  a  just  and  equitable  assessment  of  the  whole  amount 
of  the  damages  and  expenses  of  such  altering  or  widening  among  the 
owners  and  occupants  of  all  the  houses  and  lots  intended  to  be 
benefited  thereby,  to  assess  such  proportion  of  said  damages  and  ex- 
penses upon  the  corporation  or  company  owning  or  using  said  rail- 
road track  as  to  them  shall  seem  equitable  and  just;  and  such  as- 
sessment shall  be  a  lien  upon  any  property  of  said  company  in  the 
city  of  Newark,  and  may  also  be  enforced  in  the  same  m?nner  as  the 
assessment  upon  said  owners  and  occupants  of  houses  and  lots  in- 
tended to  be  benefited  thereby. 

Under  the  provisions  of  the  charter,  the  common  council,  in  1854, 
took  measures  for  altering  and  widening,  for  the  convenience  of 
public  travel,  the  part  of  Market  street  extending  from  the  New  Jer- 
sey railroad  depot  to  River  street,  on  either  side  of  the  tracks  of  the 
New  Jersey  Railroad  and  Transportation  Company,  which  tracks  are 
owned  or  used  by  said  company.  The  amount  of  the  damages  and 
expenses  of  the  altering  and  widening  of  said  street  were  duly  ascer- 
tained at  $28,788.37.  Of  this  amount  there  was  assessed  upon  nine 
houses  and  lots  of  the  railroad  company  about  $1250,  and  upon  the 
company  itself  owning  or  using  the  railroad  track  $18,000,  that  be- 


574  TAXATION  BY  SPECIAL  ASSESSMENTS. 

ing  the  amount  which  it  seemed  to  the  commissioners  equitable  and 
just  to  assess  on  the  railroad  company  under  the  provisions  of  the 
charter. 

The  company  seek  relief  from  the  assessment  made  upon  them  as 
owners  of  the  railroad  track,  and  also  from  the  assessment  upon  their 
houses  and  lots. 

By  the  charter  of  the  railroad  company,  it  is  enacted  that  the 
company  shall  pay  a  tax  of  one-half  of  one  per  cent  upon  their  cap- 
ital stock,  and  that  no  other  or  further  tax  or  imposition  shall  be 
levied  or  imposed  upon  the  company.  Harrison  385,  §  18.  Is  the 
assessment  upon  the  company,  as  owners  of  the  railroad,  for  the  pur- 
pose of  widening  Market  street,  a  tax  or  imposition  within  the  mean- 
ing of  the  charter? 

In  the  case  of  The  City  of  Paterson  v.  The  Society  for  Establish- 
ing Useful  Manufactures,  (4  Zab.  385)  it  was  held,  by  this  court, 
that  an  assessment  upon  city  lots,  for  grading  and  paving  the  street 
upon  which  they  are  situate,  and  for  curbing  and  gravelling  the  side- 
walk in  front  of  the  respective  lots,  was  not  a  tax  within  the  mean- 
ing of  that  clause  of  the  society's  charter  which  exempted  their  prop- 
erty from  all  taxes,  charges,  and  impositions  under  the  authority  of 
this  state. 

The  same  principle  has  been  recognized  and  adopted  in  The  Matter 
of  the  Mayor  of  New  York,  11  Johns  R.  77;  The  Northern  Liber- 
ties v.  St.  Johns  Church,  13  Penn.  St.  R.  104;  Alexander  and  Wil- 
son v.  The  Mayor,  &c.,  5  Gill  396.  The  subject  has  undergone  an 
elaborate  examination  in  the  more  recent  case  of  The  Mayor  and  City 
Council  of  Baltimore  v.  The  Proprietors  of  Green  Mount  Cemetery, 
7  Maryland  R.  517.  The  charter  of  the  cemetery  company  provided, 
that  the  land  appropriated  as  a  cemetery,  so  long  as  used  for  that 
purpose,  "should  not  be  liable  to  any  tax  or  public  imposition  what- 
ever/' It  was  held,  nevertheless,  that  the  cemetery  company  were  not 
exempt  from  a  paving  tax  for  paving  a  street  in  front  of  their  prop- 
erty; that  the  intent  of  the  legislature  was  to  exempt  the  property 
from  all  taxation  or  impositions  imposed  for  the  purpose  of  revenue, 
but  not  to  relieve  it  from  such  charges  as  are  inseparably  incident 
to  its  location  in  reference  to  other  property. 

It  has  been  made  a  question,  whether  an  assessment"  upon  property 
to  pay  for  opening  or  paving  a  street,  in  a  ratio  of  the  benefit  con- 
ferred, is  a  tax  within  the  appropriate  meaning  of  that  term,  or  an 
assessment  for  benefits  conferred  upon  the  property  of  the  individual. 
There  are  in  the  legislation  of  every  state  a  variety  of  statutes, 
whose  primary  design  is  the  improvement  of  private  property  and  in 


STATE  V.  CITY  OF  NEWARK.  575 

which  the  public  interest  is  merely  incidental.  To  effectuate  the 
object  of  these  laws,  they  authorize  assessments,  in  the  nature  of 
taxes,  upon  individual  property,  and  direct  the  mode  of  enforcing 
them.  Of  this  nature  are  many  statutes,  public  and  private,  in  re- 
lation to  the  claiming  of  drowned  lands  and  the  draining  and  fencing 
of  swamps  and  meadows.  The  immediate  design  of  these  acts  is  the 
improvement  of  private  property,  each  individual  interested  being  re- 
quired to  contribute  to  the  expense  in  proportion  to  his  interest  in 
the  property  and  to  the  benefit  supposed  to  be  conferred  upon  him. 
The  public  are  interested  in  this  class  of  improvements  only  as  they 
tend  to  improve  the  salubrity  of  particular  districts  or  to  increase  the 
general  wealth  of  the  community.  These  assessments  have  little 
analogy  to  public  taxes,  either  in  the  purpose  for  which  they  are  as- 
sessed or  in  the  mode  of  enforcing  them;  so  a  city  ordinance  re- 
quiring every  lot  holder  to  drain  the  surface  water  from  his  lot,  to 
avoid  the  creation  of  a  nuisance  affecting  the  public  health,  and  in 
case  of  failure  directing  it  to  be  done  at  public  expense,  and  the 
amount  to  be  a  lien  upon  the  respective  lots,  though  the  design  be 
purel}*  a  public  benefit,  savors  more  of  a  merely  police  regulation 
than  a  measure  of  taxation.  On  the  other  hand,  where  lands  are 
drained  by  public  authority  to  preserve  the  public  health,  or  sewers 
are  constructed  for  common  drainage  and  at  public  expense,  and  the 
amount  thus  drawn  from  the  common  treasury  supplied  by  taxation 
upon  the  whole  community,  or  upon  that  portion  of  it  specially 
benefited,  in  either  event  the  amount  collected  is  a  tax. 

The  theory  upon  which  such  assessments  are  sustained  as  a  legiti- 
mate exercise  of  the  taxing  power  is,  that  the  party  assessed  is  locally 
and  peculiarly  benefited  over  and  above  the  ordinary  benefit  which, 
as  one  of  the  community,  he  receives  in  all  public  improvements,  to 
the  precise  extent  of  the  assessment.  23  Conn.  204. 

If  the  assessment  made  upon  the  railroad  company  is  to  be  re- 
garded as  an  exercise  of  the  power  of  taxation,  without  reference 
to  the  special  benefit  conferred  upon  the  company,  then  clearly  the 
assessment  is  illegal. 

But  it  is  insisted  that  the  assessment  made  upon  the  company  is 
not  a  tax  within  the  meaning  of  the  exemption  contained  in  the 
charter  of  the  company,  and  falls  directly  within  the  principle  rec- 
ognized by  this  court  in  The  City  of  Paterson  v.  The  Society,  &c., 
4  Zab.  386. 

The  assessment  is,  by  the  terms  of  the  act,  directed  to  be  made, 
and  is  in  fact  made,  not  upon  the  property  of  the  company,  but 


576  TAXATION  BY  SPECIAL  ASSESSMENTS. 

upon  the  corporation  itself.  It  is  not  to  be  assessed  (as  in  the 
case  of  houses  and  lots  intended  to  be  benefited)  in  proportion  to 
the  advantages  the  company  shall  be  deemed  to  acquire;  but  the 
commissioners  are  to  .assess  upon  the  company  such  portion  of  the 
damages  and  expenses  as  to  the  commissioners  shall  deem  equitable 
and  just.  In  what  respect  does  this  differ  in  principle  from  an 
ordinary  case  of  taxation?  The  assessment  is  not  required  to  be 
made  with  any  regard  to  the  benefit  the  improvement  may  confer 
upon  the  company.  From  all  that  appears,  the  assessment  may 
have  been  graduated  by  a  regard  to  the  ability  of  the  company  to 
pay — to  the  value  of  its  stock — or  to  the  amount  of  travel  that 
passed  through  the  street  upon  the  railroad.  It  does  not  appear 
that  the  improvement  added  any  value  to  the  road  itself  or  to  the 
stock  of  the  company. 

It  is  urged  that  the  widening  of  the  street  gave  increased  facility 
to  the  operations  of  the  railroad,  by  relieving  the  crowded  state  of 
the  street,  thereby  diminishing  the  danger  of  accidents,  allowing  an 
increased  rate  of  speed,  and  thus  indirectly  adding  to  the  value  of 
the  road.  But  the  same  argument  would  apply  with  equal  force  to 
sustain  an  assessment  against  the  company  for  paving,  lighting, 
grading,  or  otherwise  improving  the  streets  and  increasing  the  facili- 
ties of  travel;  indeed  it  is  difficult  to  imagine  any  purpose  for 
which  a  municipal  tax  could  be  raised  that  might  not,  in  the  same 
way,  be  shown  to  be  indirectly  beneficial  to  the  railroad  company. 
But  in  what  mode  is  the  corporation  specially  benefited  over  any 
and  every  inhabitant  of  the  city  or  traveller  through  its  streets? 
If  the  assessment  against  the  railroad  company  may  be  sustainect 
upon  the  ground  of  special  benefits  to  the  corporation  from  the  in- 
creased facilities  of  travel  afforded  by  widening  the  street,  an  as- 
sessment may  be  sustained  upon  the  same  ground  against  the  owner 
of  every  express  wagon  or  stage  coach  that  travels  the  street.  The 
assessment  in  this  case  is  a  clear  exercise  of  the  taxing  power.  It  is 
made  for  a  public  purpose,  and  confers  no  special  benefit  upon  the 
property  of  the  company. 


FRENCH  V.  BARBER  ASPHALT  PAVING  CO         57T 

II.     METHODS  OF  ASSESSMENT. 
FRENCH  V.  BARBER  ASPHALT  PAVING  COMPANY. 

Supreme  Court  of  the  United  States.     October,  1900. 
181  United  States  824. 

This  was  a  suit  instituted  in  the  circuit  court  of  Jackson  County, 
Missouri,  by  the  Barber  Asphalt  Paving  Company,  a  corporation 
whose  business  it  was  to  construct  pavements  composed  of  asphalt, 
against  Margaret  French  and  others,  owners  of  lots  abutting  on 
Forest  avenue  in  Kansas  City,  for  the  purpose  of  enforcing  the  lien 
of  a  tax  bill  issued  by  that  city  in  part  payment  of  the  cost  of 
paving  said  avenue. 

The  work  was  done  conformably  to  the  requirements  of  the  Kan- 
sas City  charter,  by  the  adoption  of  a  resolution  by  the  common 
council  of  the  city  declaring  the  work  of  paving  the  street,  and  with 
a  pavement  of  a  defined  character,  to  be  necessary,  which  resolu- 
tion was  first  recommended  by  the  board  of  public  works  of  the 
city. 

The  cost  of  the  pavement  was  apportioned  and  charged  against 
the  lots  fronting  thereon  according  to  the  method  prescribed  by  the 
charter,  which  is  that  the  total  cost  of  the  work  shall  be  apportioned 
and  charged  against  the  lands  abutting  thereon  according  to  the 
frontage  of  the  several  lots  or  tracts  of  lands  abutting  on  the  im- 
provement  

The   defendants   pleaded   and   contended that   the 

charter  of  Kansas  City  purports  to  authorize  the  paving  of  streets 
and  to  authorize  special  tax  bills  therefor,  charging  the  cost  thereof 
on  the  abutting  property  according  to  the  frontage,  without  refer- 
ence to  any  benefits  to  the  property  on  which  the  charge  was  made 
and  the  special  tax  bills  levied,  and  that  such  method  of  apportion- 
ing and  charging  the  pavement  was  contrary  to  and  in  violation  of 
the  Fourteenth  Amendment  to  the  Constitution  of  the  United 
States. 

The  judgment  of  the  circuit  court  of  Jackson  county  was  for  the 
plaintiff  company  for  the  amount  due  on  the  tax  bill  and  for  the 
enforcement  of  the  lien.  From  this  judgment  an  appeal  was  taken 
to  the  Supreme  Court  of  Missouri,  and,  on  November  13,  1900,  the 
judgment  of  the  circuit  court  was  affirmed,  and  thereupon  a  writ  of 
error  from  this  court  was  allowed. 
37 


578  TAXATION  BY  SPECIAL  ASSESSMENTS. 

Mr.  Justice  SHIRAS,  after  stating  the  case,  delivered  the  opinion 
of  the  court. 

In  its  opinion  in  this  case  the  Supreme  Court  of  Missouri  said 
that  "the  method  adopted  in  the  charter  and  ordinance  of  Kansa? 
City  of  charging  the  cost  of  paving  Forest  avenue  against  the  ad- 
joining lots  according  to  their  frontage  had  been  repeatedly  author- 
ized by  the  legislature  of  Missouri,  and  such  laws  had  received  the 
sanction  of  this  court  in  many  decisions.  St.  Louis  v.  Allen,  53 
Mo.  44;  St.  Joseph  v.  Anthony,  30  Mo.  537;  Neenan  v.  Smith, 
50  Mo.  525 ;  Kiley  v.  Cranor,  51  Mo.  541 ;  Rutherford  v.  Hamil- 
ton, 97  Mo.  543;  Moberly  v.  Hogan,  131  Mo.  19;  Farrar  v.  St. 
Louis,  80  Mo.  379." 

Accordingly  the  Supreme  Court  of  Missouri  held  that  the  assess- 
ment in  question  was  valid,  and  the  tax  imposed  collectible.  And, 
in  so  far  as  the  constitution  and  laws  of  Missouri  are  concerned, 
this  court,  of  course,  is  bound  by  that  decision. 

But  that  court  also  held,  against  the  contention  of  the  lot  owners, 
that  the  provisions  of  the  Fourteenth  Amendment  of  the  Constitu- 
tion of  the  United  States  were  not  applicable  in  the  case;  and  our 
jurisdiction  enables  up  to  inquire  whether  the  Supreme  Court  of  Mis- 
souri were  in  error  in  so  holding. 

The  question  thus  raised  has  been  so  often  and  so  carefully  dis- 
cussed, both  in  the  decisions  of  this  court  and  in  the  state  courts, 
that  we  do  not  deem  it  necessary  to  again  enter  upon  a  considera- 
tion of  the  nature  and  extent. of  the  taxing  power,  nor  to  attempt 
to  discover  and  define  the  limitations  upon  that  power  that  may  be 
found  in  constitutional  principles. 

We  do  not  deem  it  necessary  to  extend  this  opinion  by  referring 
to  the  many  cases  in  the  state  courts,  in  which  the  principles  of  the 
foregoing  cases  have  been  approved  and  applied.  It  will  be  suffi- 
cient to  state  the  conclusions  reached,  after  a  review  of  the  state 
decisions,  by  two  text-writers  of  high  authority  for  learning  and  ac- 
curacy : 

"The  major  part  of  the  cost  of  a  local  work  is  sometimes  col- 
lected by  general  tax,  while  a  smaller  portion  is  levied  upon  the 
estates  specially  benefited. 

"The  major  part  is  sometimes  assessed  on  estates  benefited,  while 
the  general  public  is  taxed  a  smaller  portion  in  consideration  of  ft 
smaller  participation  in  the  benefits. 


FRENCH  V.  BARBER  ASPHALT  PAVIXG  CO    571) 

"The  whole  cost  in  other  cases  is  levied  on  lands  in  the  immedi- 
ate vicinity  of  the  work. 

"In  a  constitutional  point  of  view,  either  of  these  methods  is  ad- 
missible, and  one  may  sometimes  be  just  and  another  at  other 
times.  In  other  cases  it  may  be  deemed  reasonable  to  make  the 
whole  cost  a  general  charge,  and  levy  no  special  assessment  what- 
ever. The  question  is  legislative,  and,  like  all  legislative  ques- 
tions, may  be  decided  erroneously;  but  it  is  reasonable  to  expect 
that,  with  such  latitude  of  choice,  the  tax  will  be  more  just  and 
equal  than  it  would  be  were  the  legislature  required  to  levy  it  by 
one  inflexible  and  arbitrary  rule."  Cooley  on  Taxation,  447. 

"The  courts  are  very  generally  agreed  that  the  authority  to  re- 
quire the  property  specially  benefited  to  bear  the  expense  of  local 
improvements  is  a  branch  of  the  taxing  power,  or  included  within 
it Whether  the  expense  of  making  such  improve- 
ments shall  be  paid  out  of  the  general  treasury,  or  assessed  upon 
the  abutting  or  other  property  specially  benefited,  and,  if  in  the 
latter  mode  whether  the  assessment  shall  be  upon  all  property  found 
to  be  benefited,  or  alone  upon  the  abutters,  according  to  frontage 
or  according  to  the  area  of  their  lots,  is  according  to  the  present 
weight  of  authority  considered  to  be  a  question  of  legislative  ex- 
pediency." Dillon's  Municipal  Corporations,  vol.  2,  section  752, 
4th  ed. 

This  array  of  authority  was  confronted  in  the  courts  below,  with 
the  decision  of  this  court  in  the  case  of  Norwood  v.  Baker,  172  U. 
S.  269,  which  was  claimed  to  overrule  our  previous  cases,  and  to 
establish  the  principle  that  the  cost  of  a  local  improvement  cannot 
be  assessed  against  abutting  property  according  to  frontage,  unless 
the  law,  under  which  the  improvement  is  made,  provides  for  a  pre- 
liminary hearing  as  to  the  benefits  to  be  derived  by  the  property  to 
be  assessed^ 

But  we  agree  with  the  Supreme  Court  of  Missouri  in  its  view 
that  such  is  not  the  necessary  legal  import  of  the  decision  in  Nor- 
wood v.  Baker.  That  was  a  case  where  by  a  village  ordinance,  ap- 
parently aimed  at  a  single  person,  a  portion  of  whose  property  was 
condemned  for  a  street,  the  entire  cost  of  opening  the  street,  in- 
cluding not  only  the  full  amount  paid  for  the  strip  condemned,  but 
the  costs  and  expenses  of  the  condemnation  proceedings,  was  thrown 
upon  the  abutting  property  of  the  person  whose  land  was  con- 
demned. This  appeared,  both  to  the  court  below  and  to  a  majority 
of  the  judges  of  this  court,  to  be  an  abuse  of  the  law,  an  act  of 
confiscation,  and  not  a  valid  exercise  of  the  taxing  power.  This 


580  TAXATION  BY  SPECIAL  ASSESSMENTS. 

court,  however,  did  not  affirm  the  decree  of  the  trial  court  award- 
ing a  perpetual  injunction  against  the  making  and  collection  of  any 
special  assessments  upon  Mrs.  Baker's  property,  but  said: 

"It  should  be  observed  that  the  decree  did  not  relieve  the  abut- 
ting property  from  liability  for  such  amount  as  could  be  properly 
assessed  against  it.  Its  legal  effect,  as  we  now  adjudge,  was  only 
to  prevent  the  enforcement  of  the  particular  assessment  in  question. 
It  left  the  village,  in  its  discretion,  to  take  such  steps  as  were 
within  its  power  to  take,  either  under  existing  statutes  or  under 
any  authority  that  might  thereafter  be  conferred  upon  it,  to  make  a 
new  assessment  upon  the  plaintiff's  abutting  property  for  so 
much  of  the  expenses  of  the  opening  of  the  street  as  was  found 
upon  due  and  proper  inquiry  to  be  equal  to  the  special  benefits 
accruing  to  the  property.  By  the  decree  rendered  the  court  avoided 
the  performance  of  functions  appertaining  to  an  assessing  tribunal 
or  body.,  and  left  the  subject  under  the  control  of  the  local  author- 
ities designated  by  the  State." 

That  this  decision  did  not  go  to  the  extent  claimed  by  the 
plaintiff  in  error  in  this  case  is  evident,  because  in  the  opinion 
of  the  majority  it  is  expressly  said  that  the  decision  was  not 
inconsistent  with  our  decisions  in  Parsons  v.  District  of  Columbia, 
170  U.  S.  45,  56,  and  in  Spencer  v.  Merchant,  125  U.  S.  345,  357. 

It  may  be  conceded  that  courts  of  equity  are  always  open  to 
afford  a  remedy  where  there  is  an  attempt,  under  the  guise  of  legal 
proceedings,  to  deprive  a  person  of  his  life,  liberty  or  property, 
without  due  process  of  law.  And  such,  in  the  opinion  of  the 
majority  of  the  judges  of  this  court,  was  the  nature  and  effect 
of  the  proceedings  in  the  case  of  Norwood  v.  Baker. 

But  there  is  no  such  a  state  of  facts  in  the  present  case.  Those 
facts  are  thus  stated  by  the  court  of  Missouri : 

"The  work  done  consisted  of  paving  with  asphaltum  the  roadway 
of  Forest  avenue  in  Kansas  City,  thirty-six  feet  in  width,  from 
Independence  avenue  to  Twelfth  street,  a  distance  of  one-half  a  mile. 
Forest  avenue  is  one  of  the  oldest  and  best  improved  residence 
streets  in  the  city,  and  all  of  the  lots  abutting  thereon  front  the 
street  and  extend  back  therefrom  uniformly  to  the  depth  of  "an 
ordinary  city  lot  to  an  alley.  The  lots  are  all  improved  and  used 
for  residence  purposes,  and  all  of  the  lots  are  substantially  on  the 
grade  of  the  street  as  improved,  and  are  similarly  situated  with 
respect  to  the  asphalt  pavement.  The  structure  of  the  pavement 
along  its  entire  extent  is  uniform  in  distance  and  quality.  There 
is  no  showing  that  there  is  any  difference  in  the  value  of  any  lots 
abutting  on  the  improvement." 


WASHINGTON    AVENUE.  581 

What  was  complained  of  was  an  orderly  procedure  under  a 
scheme  of  local  improvements  prescribed  by  the  legislature  and 
approved  by  the  courts  of  the  State  as  consistent  with  constitu- 
tional principles. 

The  judgment  of  the  Supreme  Court  of  Missouri  is  affirmed. 

MR.  JUSTICE  HARLAN  (with  whom  concurred  MR.  JUSTICE  WHITE 
and  MR.  JUSTICE  MCKENNA)  dissenting. 


WASHINGTON  AVENUE. 

Supreme  Court  of  Pennsylvania.     October,  1871. 
69  Pennsylvania  State  352. 

On  the  14th  of  September,  1870,  the  court  (Stowe  and  Collier, 
JJ.)  decreed  an  injunction  against  the  commissioners,  restraining 
them  from  collecting  the  tax  under  cover  of  the  Act  of  1870. 

The  commissioners  appealed  to  the  Supreme  Court,  and  assigned 
the  decree  for  error. 

AGNEW,  J. — This  case  presents  a  new  question  upon  the  power 
of  taxation :  the  authority  of  the  legislature  to  compel  the  owners 
of  farm  lands,  lying  within  one  mile  on  each  side  of  a  public 
highway,  to  pay  for  grading,  macadamizing,  and  improving  it, 
by  an  assessment  upon  their  lands  by  the  acre.  It  is  not  a  case 
of  municipal  taxation  by  a  county,  township,  city  or  borough,  for 
local  improvements.  The  law  created  a  corporation  of  seven  com- 
missioners to  take  charge  of  the  avenue,  make  the  improvements, 
lay  and  collect  the  taxes,  and  provide  for  the  collection  of  tolls 
for  its  use.  The  road  has  no  respect  to  township  authorities,  town- 
ship lines,  or  the  mode  of  levying  township  taxes.  It  is  not  a  case 
of  taxation  of  frontage,  for  the  lands  of  the  plaintiffs  in  the  bill 
do  not  abut  upon  the  avenue,  but  merely  lie  within  the  prescribed 
lines  of  taxation.  It  is  not  a  case  of  local  improvement,  and  taxa- 
tion therefor,  upon  those  exclusively,  or  even  those  peculiarly 
benefited;  for  the  master  finds  that  some  of  the  plaintiffs  do  not 
use  the  avenue,  but  travel  on  parallel  roads,  that  persons  two  miles 
outside,  and  on  each  side  of  the  lines  of  taxation  are  nearly,  or 
quite,  as  much  benefited  as  those  within  these  lines,  and  that  own- 
ers of  property  and  the  public,  far  beyond  the  southern  terminus 
of  the  avenue  in  the  direction  of  Canonsburg  and  Washington 


582  TAXATION  BY  SPECIAL  ASSESSMENTS. 

are  greatly  benefited.  In  short  he  finds  that  the  proposed  improve- 
ment will  be  a  general  public  benefit. 

Washington  avenue  is  but  seven  miles  long,  passing  through 
six  townships  and  part  of  a  seventh;  but  if  this  mode  of  taxation, 
to  grade,  macadamize  and  improve  it,  can  be  maintained,  the 
legislature,  on  the  same  principle,  can  make  a  turnpike,  a  canal, 
a  railroad,  or  any  other  highway  across  the  state,  and  compel 
the  owners  of  land  within  one,  or  any  fixed  number  of  miles,  to 
pay  for  it,  and  can  assess  the  cost  per  acre,  not  only  at  $6,  $4 
and  $3  per  acre,  as  in  this  law,  but  at  sixty,  forty,  thirty,  or  any 
number  of  dollars,  necessary  to  build  the  highway.  If  this  be 
legitimate  taxation,  it  has  no  bounds,  for  it  must  be  conceded 
that  the  power  of  taxation,  properly  so  called,  has  no  limit  in  the 
Constitution,  and  is  bounded  only  by  the  necessities  of  the  state 
or  the  will  of  the  people. 

The  practice  of  municipal  taxation  by  counties,  townships,  cities 
and  boroughs  for  local  objects,  had  its  origin  in  necessity  and  con- 
venience. Hence  roads,  bridges,  culverts,  sewers,  pavements, 
school-houses,  and  like  local  improvements,  are  best  made  through 
the  municipal  divisions  of  the  state,  and  paid  for  by  local  taxa- 
tion. These  have  always  been  supported  as  proper  exercises  of  the 
taxing  power.  Nor  is  this  mode  of  taxation  inconsistent  with  our 
notions  of  the  right  of  private  property  and  of  the  equality  of 
burdens;  for  each  municipality  in  its  turn  (sooner  or  later)  by  a 
tax  on  all  its  inhabitants  pays  only  for  what  it  makes  and  enjoys 
within  its  own  limits,  and  thus  in  the  course  of  time  the  burthen 
is  equalized  upon  all,  as  every  portion  of  the  state  makes  its  own 
improvements  and  enjoys  their  peculiar  benefits.  The  practice  was 
followed  by  another  advance  in  the  local  mode  of  taxation.  In 
cities  and  towns  where  population  was  dense  the  authorities  began 
to  make  improvements  of  special  advantage  to  certain  of  the  citi- 
zens at  their  expense;  such  as  footwalks  in  the  front  of  dwellings, 
and  pavements  in  those  streets  which  were  well  built  up,  and 
where  good  carriage-ways  were  needed.  Here,  too,  though  a  step  far 
in  advance  of  the  system  of  general  taxation,  our  notions  of  private 
right  were  not  violated;  for  the  advantages  of  the  owners  were  so 
clear  in  the  promotion  of  their  convenience,  and  the  enhanced 
value  of  their  lots,  caused  by  improved  footwalks  and  carriage- 
ways, that  the  burthen  was  duly  compensated,  and  again  equality 
was  produced  as  each  street  or  alley  came  to  be  paved.  So  far. 
public  opinion  and  ancient  and  long-continued  legislative  practice 
have  sustained  local  taxation  with  great  unanimity,  ajad  this  i< 


WASHINGTON    AVENUE.  583 

strong  evidence  of  the  true  interpretation  of  the  constitutional 
power  of  the  legislature  to  authorize  municipal  taxation  of  this 
sort.  Indeed,  the  general  acquiescence  of  the  people  in  this 
exercise  of  the  power  is  so  clear,  that  few  cases  are  to  be  found 
in  the  books,  wherein  any  question  has  been  made  upon  the  power 
itself. 

Next  came  another  step  forward  in  the  exercise  of  the  power 
of  local  taxation,  but  one  more  doubtful,  and  at  first  view  not  so 
easily  perceived  to  be  within  the  legislative  power;  that  is  to  say, 
the  assessment  of  the  property  of  one  man  to  pay  the  compensation 
due  to  another  whose  property  has  been  taken  for  a  public  use. 
Here  the  right  to  assess  seems  to  be  further  removed  from  the 
true  source  of  the  power,  and  it  is  more  difficult  to  discern  the  lia- 
bility of  the  few  to  pay  what  the  state  herself  seemingly  should 
pay  by  general  taxation,  for  property  taken  under  the  power  of 
eminent  domain. 

The  exercise  of  this  power  for  benefits  ...  is  not 
by  way  of  eminent  domain,  in  the  usual  sense  of  this  term,  for  it  is 
not  a  taking  at  all,  followed  by  compensation  for  the  taking; 
but  it  is  a  special  mode  of  taxation,  which  equalizes  burdens  by 
a  counterbalance  of  benefits,  whereby  those  benefited  more  pay 
more,  and  those  benefited  less  pay  less.  It  is  thus  special  as  con- 
tradistinguished from  general  taxation,  but  not  special  as  making 
one  man  to  pay  all  or  more  than  his  just  proportion  of  a  common 
burden.  General  taxation  pays  no  regard  to  equality  of  burden, 
further  than  to  lay  the  tax  in  proportion  to  the  amount  of  the 
assessable  property  of  each  tax-payer  throwing  out  of  view  all  ques- 
tions of  special  benefit.  So  long,  therefore,  as  the  benefits  of  each 
tax-payer  are  justly  and  impartially  assessed  under  the  special  sys- 
tem, I  cannot  see  that  the  general  system  is  more  just  or  impartial. 
Indeed,  if  faithfully  executed  the  special  system  seems  to  be  more 
equal  and  just,  for,  under  the  general  system,  some  may  be  greatly 
benefited  more  than  others,  and  yet  pay  but  a  small  proportion  of 
the  tax,  considering  what  they  receive.  For  example,  a  poor 
man  may  send  many  children  to  school,  while  a  man  of  large 
property,  having  none  to  send,  may  pay  a  large  tax — and  a  man 
being  greatly  benefited  by  a  public  road  may  pay  a  very  small 
proportion  of  the  tax  which  keeps  it  up. 

Taxation,  according  to  benefits  received,  is  neither  unequal  nor 
unjust,  and  cannot,  therefore,  come  into  conflict  with  those  clauses 


584  TAXATION  BY  SPECIAL  ASSESSMENTS. 

in  the  Bill  of  Rights,  which  regard  as  sacred  the  right  of  private 
property.  So  long,  therefore,  as  a  law  faithfully  and  reasonably 
provides  for  a  just  assessment  according  to  the  benefits  conferred, 
and  does  not  impose  unfair  and  unequal  burdens,  it  cannot  be 
said  to  exceed  the  legislative  power  of  taxation,  when  exercised 
for  proper  objects.  It  is  on  this  ground  only  that  assessment 
according  to  the  frontage  of  property  on  a  public  street  to  pay  for 
its  opening,  grading,  and  paving,  is  to  be  justified.  As  a  prac- 
tical result,  in  cities  and  large  towns,  the  per-foot  front  mode  of 
assessment  reaches  a  just  and  equal  apportionment  in  most  cases. 
Hence  this  mode  has  been  deemed  a  reasonable  exercise  of  the 
taxing  power  in  such  places,  with  a  view  to  taxation  according  to 
the  benefits  received.  Whatever  doubt  might  have  been  originally 
entertained  of  it  as  a  substitute,  which  it  really  is,  for  actual 
assessment  by  jurors  or  assessors  under  oath,  it  has  been  so  often 
sanctioned  by  decision,  it  would  ill  become  us  now  to  unsettle 
its  foundation  by  disputing  its  principle.  But  it  is  an  admitted 
substitute,  only  because  practically  it  arrives,  as  nearly  as  human 
judgment  can  ordinarily  reach,  at  a  reasonable  and  just  apportion- 
ment of  the  benefits  on  the  abutting  properties.  Hence  the  fair- 
ness of  the  rule  charging  benefits  by  frontage  was  a  conceded  point 
in  Hammett  v.  The  City  of  Philadelphia,  15  P.  F.  Smith  155. 
But  this  rule,  as  a  practical  adjustment  of  proportional  benefits,  can 
apply  only  to  cities  and  large  towns,  when  the  density  of  popu- 
lation along  the  street,  and  the  small  size  of  lots,  make  it  a  rea- 
sonably certain  mode  of  arriving  at  a  true  result. 

To  apply  it  to  the  country  and  to  farm-lands  would  lead  to 
such  inequality  and  injustice  as  to  deprive  it  of  all  soundness  as 
a  rule,  or  as  a  substitute  for  a  fair  and  impartial  valuation  of 
benefits  in  pursuance  of  law;  so  that  at  the  very  first  blush,  every 
one  would  pronounce  it  to  be  palpably  unreasonable  and  unjust. 
Judged  by  this  rule  for  deciding  in  a  question  of  constitutional 
power,  the  law  in  this  case  cannot  stand. 

In  the  present  case,  an  examination  of  the  facts  in  which  the 
per-foot  frontage  rule  is  based,  discloses  at  once  the  want  of  anal- 
ogy between  large  farms  with  single  occupants  or  owners,  or  wild 
and  untenanted  land,  in  the  country,  and  the  small  lots  of  a 
crowded  street  in  a  populous  town.  The  legislature,  therefore, 
made  a  mistake  in  fixing  such  a  burden  upon  the  lands  along 
the  route  of  this  avenue.  It  is  in  fact  nothing  more  than  a  law 
to  coerce  certain  landowners  to  pay  for  a  public  improvement  in 


WASHINGTON   AVENUE.  585 

which  their  interest  is  no  greater,  and  as  to  some  of  them,  not  so 
great  as  that  of  many  others  who  pay  nothing;  and  it  offends 
against  the  clear  intent  and  spirit  of  the  Bill  of  Rights.  There 
is  no  case  in  our  books,  wherein  the  legislative  power  to  tax  has 
been  maintained  with  greater  vigor  and  ability  than  Sharpless  v. 
The  City  of  Philadelphia,  9  Harris,  yet  even  there,  the  then  Chief 
Justice  admits  (p.  166),  that  the  exercise  of  the  power  may  be 
forbidden  by  clear  implication,  as  well  as  express  restriction.  "It 
is  not  every  act  the  legislature  may  choose  to  call  a  tax-law  that 
is  constitutional."  "The  whole  public  burden,"  he  contends,  "can- 
not be  thrown  upon  a  single  individual,  under  pretence  of  taxing 
him."  This  is  a  concession  that  taxation  has  a  limit  per  se,  and  is 
not  always  co-extensive  with  legislative  exaction.  When,  therefore, 
the  Constitution  declares  in  the  ninth  article,  that  among  the 
inherent  and  indefeasible  rights  of  men  is  that  of  acquiring,  pos- 
sessing, and  protecting  property, — that  the  people  shall  be  secure 
in  their  possessions,  from  unreasonable  seizures, — that  no  one  can 
be  deprived  of  his  property  unless  by  the  judgment  of  his  peers, 
or  the  law  of  the  land — that  no  man's  property  shall  be  taken 
or  applied  to  public  use  without  just  compensation  being  made — 
that  every  man  for  an  injury  to  his  lands  or  goods  shall  have 
remedy  by  due  course  of  law,  and  right  and  justice  administered 
without  sale,  denial  or  delay — and  that  no  law  impairing  contracts 
shall  be  made — and  when  the  people,  to  guard  against  transgres- 
sions of  the  high  powers  delegated  by  them,  declared  that  these 
rights  are  excepted  out  of  the  general  powers  of  government,  and 
shall  forever  remain  inviolate,  they,  for  their  own  safety,  stamped 
upon  the  right  of  private  property,  an  inviolability  which  cannot 
be  frittered  away  by  verbal  criticism  on  each  separate  clause, 
nor  the  united  fagot  broken,  stick  by  stick,  until  all  its  strength 
is  gone. 

There  is  a  clear  implication  from  the  primary  declaration  of 
the  inherent  and  indefeasible  right  of  property,  followed  by  the 
clauses  guarding  it  against  specific  transgressions,  that  covers  it 
with  an  aegis  of  protection  against  all  unjust,  unreasonable  and 
palpably  unequal  exactions  under  any  name  or  pretext.  Nor  is 
this  sanctity  incompatible  with  the  taxing  power,  or  that  of  emi- 
nent domain,  where  for  the  good  of  the  whole  people,  burdens 
may  be  imposed  or  property  taken. 

I  admit  that  the  power  to  tax  is  unbounded  by  any  express  limit 
in  the  Constitution — that  it  may  be  exercised  to  the  full  extent 
of  the  public  exigency.  I  concede  that  it  differs  from  the  power 


586  TAXATION  BY  SPECFAL  ASSESSMENTS. 

of  eminent  domain,  and  has  no  thought  of  compensation  by  way  of 
a  return  for  that  which  it  takes  and  applies  to  the  public  good, 
further  than  all  derive  benefit  from  the  purpose  to  which  it  is 
applied.  But  nevertheless  taxation  is  bounded  in  its  exercise  by  its 
own  nature,  essential  characteristics  and  purpose.  It  must  therefore 
visit  all  alike  in  a  reasonably  practicable  way  of  which  the  legis- 
lature may  judge,  but  within  the  just  limits  of  what  is  taxation. 
Like  the  rain  it  may  fall  upon  the  people  in  districts  and  by 
turns,  but  still  it  must  be  public  in  its  purpose,  and  reasonably 
just  and  equal  in  its  distribution,  and  cannot  sacrifice  individual 
right  by  a  palpably  unjust  exaction.  To  do  so  is  confiscation,  not 
taxation,  extortion,  not  assessment,  and  falls  within  the  clearly  im- 
plied restriction  in  the  Bill  of  Eights. 

It  is  found  by  the  master,  and  if  it  had  not  been  found  by 
him,  it  is  perfectly  obvious,  that  this  avenue  will  be  one  of  general 
public  benefit;  and  especially  that  it  will  be  of  great  convenience 
and  individual  benefit  to  citizens  and  taxpayers,  beyond  the  limit 
of  taxation  along  the  road,  both  laterally  and  terminally. 

Indeed,  beyond  its  southern  terminus  its  benefits  reach  a  con- 
siderable distance  into  the  county  of  Washington.  This  brings 
it  within  the  principle  of  Hammett  v.  The  City  of  Philadelphia, 
supra;  expressed  in  these  words,  at  the  conclusion  of  the  opinion 
of  our  brother  Sharswood:  "Local  assessments  can  only  be  con- 
stitutional when  imposed  to  pay  for  local  improvements,  clearly 
conferring  special  benefits  on  the  properties  assessed,  and  to  the 
extent  of  these  benefits.  They  cannot  be  imposed  when  the  im- 
provement is  either  expressed,  or  appears  to  be,  for  general  benefit." 
I  concurred  in  that  opinion,  and  I  see  no  reason  to  regret  my 
concurrence;  but  on  the  contrary,  I  see  in  the  present  case  much 
to  confirm  it;  and  the  examination  I  have  just  made  into  the 
power  of  special  taxation,  it  seems  to  me,  tends  to  confirm  and 
strengthen  what  was  so  well  reasoned  in  Hammett  v.  The  City. 
Indeed  I  consider  it  a  fortunate  circumstance  that  that  case  came 
up,  for  it  led  into  an  inquiry  into  the  power  of  special  taxation, 
which  was  in  danger  of  running  wild  by  insensible  degrees  and  lead- 
ing, before  we  had  become  aware  of  it,  into  the  exercise  of  a  bas- 
tard power,  dangerous  to  the  right  of  private  property,  and  vio- 
lative  of  the  provisions  in  the  Bill  of  Rights,  placed  there  for  its 
protection.  In  questions  of  power  exercised  by  agents,  it  sometimes 
is  the  misfortune  of  communities  to  be  carried,  step  by  step,  into 
the  exercise  of  illegitimate  powers  without  perceiving  the  progres- 
sion, until  tlie  usurpations  become  so  firmly  fixed  by  precedents, 


WEIGHT  V.  CITY  OF  CHICAGO.  587 

it  seems  to  be  impossible  to  recede  or  to  break  through  them.  The 
majority  opinion  in  that  case  did  not  then,  and  this  opinion  does 
not  now,  dispute  the  long-recognized  power  of  local  taxation  for 
local  improvements,  according  to  the  benefits  conferred;  but  they 
meet  and  dispute  departures  from  that  power,  which  if  recog- 
nized, will  land  in  the  overthrow  of  the  right  of  private  property. 
Laws  which  cast  the  burdens  of  the  public  on  a  few  individuals, 
no  matter  what  the  pretence,  or  how  seeming  their  analogy  to  con- 
stitutional enactments,  are  in  their  essence  despotic  and  tyrannical, 
and  it  becomes  the  judiciary  to  stand  firmly  by  the  fundamental 
law,  in  defence  of  those  general,  great,  and  essential  principles 
of  liberty  and  free  government,  for  the  establishment  and  perpetu- 
ation of  which  the  Constitution  itself  was  ordained.  Should  we 
now  suffer  this  law  to  pass  without  judicial  criticism  and  con- 
demnation upon  a  false  analogy  of  the  frontage  rule  in  cities  and 
large  towns,  we  should  leave  open  a  door  for  future  impositions 
upon  private  property,  so  wide  and  specious,  errors  the  most  odious 
and  of  enormous  proportions  would  enter  in. 
For  these  reasons  the  decree  below  is  affirmed. 


III.    POWERS  OF  LOCAL  AUTHORITIES. 
WEIGHT  ET  AL.  V.   CITY  OF  CHICAGO. 

Supreme   Court   of  Illinois.     April,   1858. 
20  Illinois,  252. 

This  was  an  application  for  judgment  against  certain  property 
for  nonpayment  of  a  special  assessment,  levied  by  the  common 
council  of  the  city  of  Chicago,  upon  said  property  for  dredging, 
or  otherwise  deepening  the  Chicago  river  and  its  branches,  between 
the  west  line  of  Franklin  street,  north  line  of  Lake  street,  north 
line  of  Kinzie  street,  and  the  established  dock  lines,  and  which 
assessment  was  ordered  by  said  common  council,  upon  the  report 
and  recommendation  of  the  city  superintendent  of  said  city  of 
Chicago.  There  was  an  order  of  sale,  under  the  assessment,  of  cer- 
tain lots  benefited,  the  owners  of  which  lots  sue  out  this  writ  of 
error. 

CATON,  C.  J. — We  have  arrived  at  our  conclusions  in  this  case 
with  reluctance.  That  there  is  as  much  propriety  in  requiring 


588  TAXATION  BY  SPECIAL  ASSESSMENTS. 

the  owners  of  property  benefited  by  the  deepening  of  the  harbor,  to 
pay  the  expenses  of  the  improvement,  as  there  is  in  requiring  those 
benefited  by  widening  it,  or  improving  a  street,  would  seem  to  be 
self-evident.  To  say  that  the  owner  of  a  dock,  which  is  useless 
because  of  the  want  of  water  to  bring  vessels  to  it,  shall  not  pay 
the  expense  of  deepening  the  harbor  in  front  so  as  to  make  it 
valuable,  while  the  owner  of  the  lot  shall  be  compelled  to  pay  for 
paving  the  street  in  its  neighborhood,  we  cannot  doubt  is  unjust, 
and  had  we  the  making  of  the  laws,  we  could  not  hesitate  to  affirm 
this  judgment.  Our  duty  is  confined  to  finding  out  what  the 
laws  are,  and  expounding  them.  It  is  admitted  in  the  argument, 
for  it  could  not  be  denied,  that  there  is  no  provision  in  the  city 
charter,  and  no  law  upon  the  statute  book  authorizing  special 
assessments  to  deepen  the  river,  and  it  cannot  be  pretended  that 
they  are  authorized  by  the  common  law.  The  city  government 
has  express  authority  to  raise  funds  by  general  taxation  for  general 
purposes.  It  has  general  authority  by  the  second  clause  of  the 
fourth  section  of  the  fourth  chapter  of  its  charter,  "to  remove 
and  prevent  all  obstructions  in  the  waters  which  are  public  high- 
ways in  said  city,  and  to  widen,  straighten  and  deepen  the  same," 
and  by  the  fifty-third  clause  of  the  same  section,  very  ample  juris- 
diction over  the  harbor  is  conferred  upon  the  city  government,  and 
the  extent  of  the  harbor  is  defined.  By  the  fifty-fourth  clause  of 
the  same  section,  exclusive  control  is  given  to  the  city  govern- 
ment over  the  streets,  alleys,  sidewalks  and  bridges  of  the  city, 
and  to  open,  widen  and  straighten  the  same,  and  to  put  drains  and' 
sewers  therein.  By  conferring  these  powers,  it  was  not  supposed 
by  the  legislature  that  authority  was  given  to  levy  special  assess- 
ments upon  the  property  benefited  thereby  to  pay  for  such  improve- 
ments. If  this  were  not  sufficiently  manifest  from  the  fact  that 
these  provisions  are  silent  about  any  such  authority,  it  becomes 
so  when  we  see  that  by  other  provisions  of  the  charter  express 
authority  is  given  to  levy  such  special  assessments  to  defray  the 
expenses  of  a  part  of  such  improvement.  The  sixth  and  seventh 
chapters  of  the  charter  are  devoted  to  the  subject  of  the  improve- 
ment of  streets,  etc.,  and  define  for  what  improvements  special 
assessments  may  be  laid  upon  the  property  benefited,  and  the  mode 
of  levying  and  collecting  them,  the  particular  provisions  of  which 
it  is  unnecessary  to  state.  It  is  enough  that  the  legislature  deemed 
it  necessary  to  make  snecial  provisions,  granting  particular  author- 
ity to  levy  special  assessments  for  certain  specified  improvements. 
It  shows  that  there  was  no  intention  to  grant  authority  to  make 


WEIGHT  V.  CITY  OF  CHICAGO.  589 

such  special  assessments  by  simply  conferring  authority  to  make 
the  improvements.  This  view  is  more  especially  confirmed,  if  pos- 
sible, by  the  fact  that  the  legislature  has,  by  a  separate  clause,  con- 
ferred special  authority  upon  the  common  council  to  levy  special 
assessments  upon  property  benefited  thereby,  for  widening  the 
river.  This  is  found  in  the  fifth  section  of  the  act  of  27th  Febru- 
ary, 1845,  concerning  wharfing  privileges  in  Chicago,  and  which 
is  substantially  an  amendment  to  the  city  charter.  That  section 
authorizes  the  common  council  to  widen  the  Chicago  river  and  its 
branches  within  the  city,  by  cutting  away  lots  and  streets  on  its 
borders,  and  "such  proceedings  shall  be  had  for  the  condemnation 
and  appropriation  of  such  lot  or  lots  or  part  of  a  lot,  and  the 
assessment  of  damages  and  benefits,  as  are  authorized  and  directed 
by  the  act  to  incorporate  the  city  of  Chicago  and  the  acts  amend- 
ing the  same,  for  the  opening  of  streets  and  alleys;  and  the  pro- 
visions of  said  act  shall  apply  to  the  widening  of  said  river  and 
its  branches  so  far  as  they  are  applicable."  This  evidently  refers 
to  and  adopts  the  sixth  chapter  of  the  city  charter,  the  tenth  section 
of  which  expressly  authorizes  special  assessments  upon  property 
benefited  by  the  improvement.  While  we  thus  find  a  special  pro- 
vision authorizing  by  a  fair  and  reasonable  construction  special 
assessments  to  widen  the  river,  there  is  no  authority  anywhere  to 
be  found,  even  by  implication,  for  such  assessments  to  deepen  the 
river,  and  this  special  provision  in  the  one  case  and  not  in  the  other, 
by  every  known  rule  for  construing  statutes,  is  a  clear  indication 
of  the  legislative  will,  that  no  such  power  was  intended  to  be 
granted  in  the  case  omitted.  We  must  hold  then  that  this  special 
assessment  was  void  for  the  simple  reason  that  the  legislature  has 
not  seen  proper  to  confer  any  authority  to  levy  it.  Without  law  it 
could  not  be  done. 

The  judgment  must  be  reversed. 

Judgment   reversed. 


590  TAXATION  BY  SPECIAL  ASSESSMENTS. 


PHILADELPHIA  V.  PENNSYLVANIA  HOSPITAL. 

Supreme  Court  of  Pennsylvania.     October,  1891. 
143  Pennsylvania  State,  361. 

Opinion,  Mr.  Justice  STERRETT: 

In'  this  action  of  scire  facias  sur  municipal  claim  for  curbing, 
etc.,  the  defendant's  affidavit  of  defense  was  adjudged  insufficient, 
and  judgment  was  accordingly  entered  in  favor  of  plaintiff  for 
the  amount  of  its  claim.  From  that  judgment  this  appeal  was 
taken  by  defendant.  The  facts  are  fully  presented  in  the  statement 
of  claim  and  affidavit  of  defence.  There  is  no  question  as  to  the 
curbing  having  been  properly  done,  nor  as  to  the  cost  thereof. 
The  sole  question  is  whether,  upon  any  legal  ground,  either  as  a  tax 
or  under  the  police  power  of  the  city,  the  assessment  in  question 
can  be  sustained. 

It  is  contended  by  defendant  that  an  assessment  for  curbing  is 
a  tax;  and  inasmuch  as  its  "estate  and  property,  both  real  and 
personal,  are  by  law  exempt  from  the  payment  of  tax  of  any  kind 
whatsoever,"  the  plaintiff's  case  cannot  be  enforced;  and  in  support 
of  the  position,  Olive  Cemetery  Co.  v.  Philadelphia,  93  Pa.  129, 
and  other  taxes,  recognizing  the  right  of  local  taxation  for  certain 
local  purposes  are  cited.  But  it  is  a  mistake  to  assume  that  the 
authority  vested  in  municipal  corporations  to  require  owners  to  curb, 
pave,  and  keep  in  repair  the  sidewalks  in  front  of  their  respective 
properties,  rests  upon  the  same  basis  as  the  right  of  local  taxation 
recognized  in  the  cases  referred  to.  There  is  a  marked  distinc- 
tion between  them.  In  the  former,  a  duty  is  imposed  on  the 
property  owner  in  the  nature  of  a  police  regulation.  In  the  latter, 
no  such  duty  is  cast  upon  him.  This  distinction  was  clearly  pointed 
out  by  the  present  Chief  Justice  in  Wilkinsburg  Bor.  v.  Home  for 
Aged  Women,  131  Pa.  117,  which,  in  principle,  is  identical  with 
this. 

In  Cooley  on  Taxation,  398,  the  learned  author  says:  "The  cases 
of  assessments  for  the  construction  of  walks  by  the  sides  of  the 
streets  in  cities  and  other  populous  places  are  more  distinctly  refer- 
able to  the  power  of  police.  These  footwalks  are  not  only  required, 
as  a  rule,  to  be  put  and  kept  in  proper  condition  for  the  use  of 
the  adjacent  proprietors,  but  it  is  quite  customary  to  confer  by 
municipal  charters,  full  authority  upon  municipalities  to  order  the 
walks,  of  a  kind  and  quality  by  them  prescribed,  to  be  con- 
structed by  the  owners  of  adjacent  lots  at  their  own  expense,  within 


PHILADELPHIA  V.  PENNSYLVANIA  HOSPITAL.    591 

a  time  limited  by  the  order  for  the  purpose;  and  that,  in  case 
of  their  failure  so  to  construct  them,  it  shall  be  done  by  the  public 
authorities,  and  the  cost  collected  from  such  owners  or  made  a  lien 
upon  their  properties.  When  this  is  done,  the  duty  must  be  looked 
upon  as  being  enjoined  as  a  regulation  of  police,  made  because  of 
the  peculiar  interest  such  owners  have  in  their  walks,  and  because 
their  situation  gives  them  peculiar  fitness  and  ability  for  perform- 
ing, with  promptness  and  convenience,  the  duty  of  putting  them  in 
proper  shape,  and  of  afterwards  keeping  them  in  a  condition  suit- 
able for  use.  .  .  .  The  courts  distinguish  this  from 
taxation,  on  the  ground  that  the  peculiar  interest  which  those  upon 
whom  the  duty  is  imposed  have  in  its  performance,"  etc.  Again,  on 
page  588,  he  says:  "The  distinction  between  a  demand  for  money 
under  the  police  power  and  one  under  the  power  to  tax,  is  not  so 
much  one  of  form  as  of  substance.  The  proceedings  may  be  the 
same  in  the  two  cases,  though  the  purpose  is  essentially  different. 
The  one  is  made  for  regulation,  the  other  for  revenue.  If,  there- 
fore, the  purpose  is  evident,  there  can  be  no  difficulty  in  classify- 
ing the  case  and  referring  it  to  its  proper  power."  The  same  dis- 
tinction was  recognized  in  re  Goddard,  16.  Pick.  504,  509. 

The  ordinance  of  May  3,  1855,  passed  in  pursuance  of  the 
authority  vested  in  councils  by  the  act  of  April  16,  1838,  and  Feb- 
ruary 2,  1854,  provides  that  the  footways  of  all  public  streets  and 
highways  .  .  .  shall  be  graded,  curbed,  and  paved, 
and  kept  in  repair  at  the  expense  of  the  owners  of  the  ground 
fronting  thereon."  The  third  section  of  same  ordinance  provides 
that  the  owner  shall  have  the  right  to  do  the  work  of  paving  and 
curbing  and  keeping  in  repair  said  footways,  and,  on  his  failure 
to  do  so,  the  city  shall  do  it  at  its  expense,  and  may  file  a  lien  for 
the  amount.  This  requirement  is  clearly  not  for  the  purpose  of 
revenue.  It  is  simply  a  regulation  under  the  police  power  of  the 
municipality.  On  principle,  as  well  as  on  the  authority  of  our  own 
and  other  cases,  the  amount  expended  by  the  city  in  enforcing  the 
regulation  is  not  in  any  proper  sense  of  the  word  a  tax.  It  is  a 
liability  incurred  for  neglect  to  perform  a  duty  imposed  by  the 
police  power  of  the  city.  In  so  holding,  we  adhere  to  the  principle 
ruled  in  Wilkinsburg  Borough  v.  Home  for  Aged  Women,  supra- 

Judgment  affirmed. 


592  TAXATION  BY  SPECIAL  ASSESSMENTS. 


McCHESNEY  ET  AL.  V.  VILLAGE  OF  HYDE  PARK. 

Supreme  Court  of  Illinois.    October,  1894. 
151   Illinois,  634- 

Mr.  Justice  BAKER  delivered  the  opinion  of  the  court: 

On  March  27,  1888,  a  petition  was  filed  by  the  village  of  Hyde 
Park  in  the  County  Court  of  Cook  County,  in  a  special  assessment 
proceeding.  The  assessment  was  based  upon  an  ordinance  of  the 
Village  of  Hyde  Park,  passed  on  November  7,  1887,  for  the  cost  of 
constructing  a  certain  sewer,  and  erecting  pumping  works  for  drain- 
age purposes.  After  the  coming  in  of  the  assessment  roll,  A.  B. 
McChesney  et  al.  filed  objections  to  the  confirmation  of  the  assess- 
ments as  to  their  respective  lands.  Upon  a  hearing,  A.  B.  McChesney 
et  al.  failed  to  sustain  their  objections,  and  a  judgment  of  confirma- 
tion was  entered.  Thereupon  said  A.  B.  McChesney  et  al.  appealed 
to  this  court,  and  filed  here  a  transcript  of  the  record. 

On  July  13,  1889,  another  petition  was  filed  by  said  village  in 
said  county  court,  in  another  assessment  proceeding.  The  assess- 
ment in  said  latter  proceeding  was  based  on  another  and  different 
ordinance,  an  ordinance  passed  by  the  village  on  May  24,  1889,  for 
an  assessment  to  be  made  for  the  maintenance  and  operation  of  the 
aforesaid  pumping  works  and  drainage  system.  Upon  the  filing  of 
the  assessment  roll  in  this  latter  proceeding,  said  A.  B.  McChesney 
et  al.  filed  objections  to  the  confirmation  of  the  assessment  as  to 
their  respective  lands.  They  also  failed  to  sustain  their  objections 
in  this  latter  proceeding,  and  the  court  rendered  a  judgment  of  con- 
firmation. A.  B.  McChesney  et  al.  then  took  an  appeal  from  this 
latter  judgment,  and  a  transcript  of  the  record  in  this  latter  pro- 
ceeding was  thereupon  filed  in  this  court. 

A  third  transcript  of  record  was  also  filed  in  this  court,  containing 
a  bill  of  exceptions,  from  which  it  appears  that,  by  agreement  and 
stipulation  of  parties,  the  two  cases  mentioned  above  were  tried 
together,  and  further  appears  that  by  agreement  of  parties  the  excep- 
tions taken  in  both  cases  might  be  shown  in  both  cases  in  one  bill 
of  exceptions,  as  the  cases  were  tried  together  by  consent. 

The  two  cases  were  submitted  to  this  court  as  one  case;  and  an 
opinion  filed  which  affirmed  both  judgments.  Thereafter,  upon  peti- 
tion of  appellants,  a  rehearing  was  ordered. 

In  respect  to  the  first  case,  which  was  predicated  upon  the  ordinance 
of  November  7,  1887,  we  re-adopt  and  adhere  to  what  was  said  in 
the  opinion  filed  prior  to  the  rehearing. 


McCHESNEY  V.  VILLAGE  OF  HYDE  PARK.         593 

In  the  second  case,  in  which  the  village  of  Hyde  Park  filed  its  peti- 
tion in  the  County  Court  on  July  13,  1889,  the  proceedings  were 
based  upon  an  ordinance  passed  on  May  24,  1889.  That  ordinance 
provides,  that  an  assessment  be  made  for  the  maintenance  and  opera- 
tion of  the  drainage  system  and  pumping  works  of  the  district,  etc. ; 
that  the  expense  and  cost  of  said  maintenance  and  operation  shall 
be  defrayed  wholly  by  a  special  assessment  to  be  made  in  accordance 
with  sections  18  to  51  inclusive  of  article  9  of  the  act  to  provide  for 
the  incorporation  of  cities  and  villages;  and  that  certain  per- 
sons designated  therein  be  and  are  "appointed  commissioners  to  make 
an  estimate  of  the  cost  of  the  said  maintenance  and  operation  contem- 
plated by  this  ordinance,  including  labor,  materials  and  all  other 
expenses  attending  the  same,"  etc.  .  .  . 

Under  this  state  of  facts  the  question  is  raised  whether  a  city 
or  village  can  pass  a  lawful  or  valid  ordinance  for  a  special  assess- 
ment for  the  operation  of  or  for  defraying  the  running  expenses  of  a 
drainage  system,  and  pumping  works  connected  therewith,  after  they 
have  been  constructed  ? 

It  is  admitted,  and  manifest  even  if  not  admitted,  that  the  only 
authority  or  power  which  the  village  of  Hyde  Park  could  claim  for 
passing  the  ordinance  of  May  24,  1889,  is  through  the  act  of  the 
general  assembly,  approved  June  22,  1885,  and  found  in  the  laws  of 
1885,  on  page  60.  And,  to  go  back  one  step  further,  and  to  the 
source  of  power,  the  only  authority  the  general  assembly  had  to  enact 
said  act  of  1885  is  found  in  amended  section  31,  of  article  4,  of  the 
constitution  of  the  state,  adopted  by  the  people  at  an  election  held 
November  5,  1878. 

.  .  .  We  do  not  think  that  the  legislature  intended  by  the  act 
of  June  22,  1885,  to  give  to  the  corporate  authorities  of  cities  and 
villages  any  powers  other  than  those  it  was  authorized  to  vest  in 
such  corporate  authorities. 

The  cost  of  construction  and  of  maintaining  or  keeping  in  repair 
are  the  only  costs  that  can  be  levied  upon  the  property  benefited  by 
special  assessment.  The  word  "operate"  does  not  mean  the  same 
thing  as  either  the  word  "construct,"  the  word  "maintain,"  or  the 
expression  "keep  in  repair,"  and  is  not  included  in  the  significations 
of  either.  Webster  defines  the  word  "operate"  as  meaning  "to  put 
into,  or  to  continue  in  operation  or  activity,"  "to  work,  or  to  operate 
a  machine."  The  correct  solution  is,  that  the  cost  of  operating,  when 
completed,  or  paying  the  running  expenses  when  the  ditch,  pumping 
38 


594  TAXATION  BY  SPECIAL  ASSESSMENTS. 

works  and  machinery  are  in  activity,  devolved  upon  the  village  of 
Hyde  Park  as  a  part  of  its  general  and  corporate  current  expenses 
as  an  incorporated  village;  the  drainage  district,  as  a  district,  heing 
in  the  meanwhile  liable  to  pay  all  expenses  that  come  within  the 
category  of  maintenance  or  keeping  in  repair,  as  herein  denned. 

The  operating  expenses  being  a  legitimate  current  expense  of  the 
municipality  of  the  village,  and  an  indebtedness  incurred  for  cor- 
porate purposes,  must  be  paid  by  it,  or  since  its  annexation  to  the  city 
of  Chicago,. by  said  city.  .  .  . 

Our  conclusion  is  that  the  ordinance  of  May  24,  1889,  is  invalid, 
both  because  it  is  not  authorized  by  amended  section  31  of  article  4 
of  the  constitution,  and  because,  even  if  it  was  not  unconstitutional, 
no  power  to  pass  it  was  given  by  the  act  of  the  general  assembly, 
approved  June  22,  1885 ;  and  that  consequently  all  proceedings  under 
it  were  unauthorized  and  void. 

It  follows  from  what  we  have  said  .  .  .  that  the  judgment  of 
said  court  confirming  the  assessment  made  upon  appellant's  property 
in  the  second  proceeding,  which  was  based  upon  the  ordinance  of 
May  24,  1889,  is  reversed.  .  .  . 

WILKIN,  C.  J.,  dissenting.  I  do  not  think  pumping  works  in 
connection  with  a  drainage  system  under  the  act  of  June,  1885,  can  be 
operated  by  general  taxation. 


McCHESNEY  V.  CITY  OF  CHICAGO. 

Supreme  Court  of  Illinois.     February,  1898. 
Ill  Illinois,  253. 

Mr.  Justice  WILKIN  delivered  the  opinion  of  the  court : 
The  city  of  Chicago  filed  its  petition  in  the  county  court  of  Cook 
county  for  the  levy  and  confirmation  of  a  specific  assessment,  under 
article  9  of  the  City  and  Village  Act,  for  the  laying  of  a  cement 
sidewalk  on  Rhodes  avenue.  A  roll  was  duly  made  and  returned. 
At  the  time  set  for  hearing  the  appellant  appeared  and  filed  certain 
objections,  all  of  which,  save  one,  were  overruled  at  the  hearing.  An 
objection  to  the  effect  that  the  assessment  was  greater  than  the 
benefits  was  sustained,  and  the  assessment  roll  modified  and  confirmed. 
One  of  the  objections  overruled,  was  that  the  ordinance  authorizing 
the  improvement  did  not  specify  the  nature,  character,  locality  and 


MERRITT  V.  CITY  OF  KEWANEE.  595 

description  of  the  proposed  improvement,  and  this  is  assigned  for 
error.     .     .     .     This  objection  should  have  been  sustained. 

Another  objection  is,  that  the  improvement  was  unnecessary.  It 
is  claimed  that  the  appellant  had  a  plank  sidewalk  in  front  of  his 
lots,  which  was  up  to  grade  and  in  good  repair.  The  question  of  the 
necessity  of  a  local  improvement  is  committed  by  the  law  to  the  city 
council,  and  the  courts  have  no  right  to  interfere,  except  in  a  case 
where  it  clearly  appears  that  such  discretion  has  been  abused.  The 
ground  on  which  the  courts  interfere  is,  that  the  ordinance  is  so 
unreasonable  as  to  render  it  void.  Under  the  proofs  that  was  not  the 
case  here. 

For  the  error  in  not  sustaining  the  objection  with  reference  to  the 
uncertainty  of  the  location  of  the  improvement  the  judgment  of 
the  county  court  must  be  reversed. 

Judgment  reversed. 


IV.     REGULARITY  OF  PROCEEDINGS. 
MERRITT  ET  AL.  V.  CITY  OF  KEWANEE. 

Supreme  Court  of  Illinois.     October,  1898. 
175  Illinois,  587. 

Mr.  Justice  MAGRUDER  delivered  the  opinion  of  the  court: 
The  present  proceeding  is  brought  under  the  act  of  June  14,  1897, 
"concerning  local  improvements." 

Section  7  provides,  that  all  ordinances  for  local  improvements  to  be 
paid  for  wholly  or  in  part  by  special  assessment  or  special  taxation 
shall  originate  with  the  board  of  local  improvements. 

Section  9  provides  that  with  any  such  ordinance,  presented  by  such 
board  to  the  city  council,  there  shall  also  be  presented  a  recommen- 
dation of  such  improvement  by  the  said  board,  signed  by  at  least  a 
majority  of  the  members  thereof. 

One  of  the  objections,  made  by  the  appellants  in  the  court  below, 
was  that  the  ordinance  No.  10  was  invalid  upon  the  alleged  ground 
that  the  owners  of  a  majority  of  the  contiguous  property  did  not 
petition  for  said  improvement,  and  that  no  petition  signed  by  the 
owners  of  a  majority  of  said  property  was  ever  presented  to  the  board 


596  TAXATION  BY  SPECIAL  ASSESSMENTS. 

of  local  improvements  before  the  passage  of  said  ordinance;  and  that 
no  local  ordinance  was  passed  or  adopted  by  the  city  council  of  the 
city  of  Kewanee  authorizing  said  assessment. 

By  the  terms  of  section  9,  the  recommendation  made  by  the  board 
of  local  improvements  is  made  prima  facie  evidence,  that  all  the 
preliminary  requirements  of  the  law  have  been  complied  with.  Hence, 
in  the  present  case,  when  the  petition  and  the  recommendation  and 
the  ordinance  were  introduced  in  evidence,  the  city  made  a  prima 
facie  case,  and  the  burden  of  proof  was  upon  the  objectors  to  show, 
if  such  was  the  fact,  that  the  petition  had  not  been  signed  as  required 
by  the  act.  Section  9  says  that,  "if  a  variance  be  shown  on  the 
proceedings  in  court,  it  shall  not  affect  the  validity  of  the  proceedings 
unless  the  court  shall  deem  the  same  wilful  or  substantial."  It  is 
difficult  to  understand  just  what  is  meant  here  by  the  word,  "wilful." 
It  seems  impossible  to  believe,  that  the  men,  who  signed  their  own 
names  as  owners  to  this  petition,  did  not  know  that  they  themselves 
were  not  the  owners,  but  that  their  wives  were  the  owners  of  the 
property  for  which  they  signed.  Their  act  in  so  signing  would  seem 
to  have  been,  in  a  certain  sense,  wilful,  if  not  fraudulent.  But, 
whether  this  is  so  or  not,  we  think  the  proof  here  made  shows  that 
there  was  a  "substantial"  variance  between  the  requirements  of  the 
law  and  the  mode  of  signing  the  petition.  Where  the  law  requires 
that  owners  shall  sign  the  petition,  and  parties  who  are  not  owners 
sign  the  petition,  there  certainly  is  a  substantial  variance  between  the 
law  and  the  act  done.  It  sufficiently  appears  from  the  testimony  of 
these  signers  themselves,  that  their  wives  were  the  owners  of  the 
property ;  and,  while  some  of  the  proof  introduced  'to  establish  owner- 
ship may  not  have  been  competent  for  that  purpose,  there  was  other 
proof  that  was  competent.  The  word,  "owner,"  as  here  used  in  the 
statute,  means  owner  in  fee.  (Illinois  Mutual  Ins.  Co.  v.  Marseilles 
Manf.  Co.,  1  Gilm.  236 ;  Wright  v.  Bennett,  3  Scam.  258 ;  Whiteside  v. 
Divers,  4  id.  336;  Jarrot  v.  Vaughn,  2  Gilm.  132.)  Although  the 
ordinance  was  prima  facie  valid  in  view  of  the  recommendation  made 
by  the  board  of  improvements,  yet,  when  the  proof  showed  that  the 
petition  had  not  been  signed  by  the  owners  of  a  majority  of  the 
abutting  property,  the  void  character  of  the  ordinance  was  established. 
It  is  well  said  that  an  act,  which  is  void  at  the  time  it  is  done,  cannot 
be  ratified.  Even  the  legislature  cannot  impart  life  to  a  void  pro- 
ceeding. Mechem  on  Agency,  sec.  114;  Day  v.  McAllister,  15  Gray, 
433 ;  1  Am.  &  Eng.  Ency.  of  Law,  p.  430 ;  McDaniel  v.  Correll,  19  111. 
226;  Miller  v.  City  of  Amsterdam,  supra;  Marshall  v.  Silliman,  61 


WHITEFORD  TOWNSHIP  V.  PROBATE  JUDGE.       597 

111.  218.  Unless  ai  valid  ordinance  is  shown  there  is  nothing  upon 
which  the  subsequent  assessment  proceeding  can  rest.  Such  a  valid 
ordinance  is  the  foundation  of  an  improvement  by  special  assessment 
or  special  taxation,  and  cannot  be  dispensed  with.  (City  of  Carlyle  v. 
County  of  Clinton,  140  111.  512;  Lindsay  v.  City  of  Chicago,  115 
id.  120;  City  of  East  St.  Louis  v.  Albrecht,  150  id.  510.)  In  pro- 
ceedings for  the  collection  of  taxes  or  special  assessments  or  special 
taxes,  the  requirements  of  the  statute  must  be  strictly  followed. 
(McChesney  v.  People,  148  111.  221;  City  of  Alton  v.  Middleton's 
Heirs,  158  id.  442.) 

We  are  of  the  opinion  that  the  county  court  erred  in  not  sustain- 
ing the  objection  that  the  petition  for  the  improvement  in  this  case 
was  not  signed  by  the  owners  of  a  majority  of  the  property  in  any 
one  or  more  contiguous  blocks  abutting  on  the  street  proposed  to  be 
paved. 

For  the  error  in  refusing  to  sustain  the  objection  the  judgment  of 
confirmation  entered  by  the  county  court  is  reversed,  and  the  cause 
is  remanded  to  that  court  for  further  proceedings  in  accordance  with 
the  views  herein  expressed. 

Reversed  and  remanded. 


WHITEFORD  TOWNSHIP  V.  PROBATE  JUDGE. 

Supreme  Court  of  Michigan.     January,  188 '4. 
53  Michigan,  130. 

SHERWOOD,  J.  The  certiorari  in  this  case  brings  before  us 
proceedings  had  before  the  judge  of  probate  for  the  county  of  Mon- 
roe, appointing  a  special  drain  commissioner  to  construct  a  certain 
ditch,  and  widen,  deepen  and  straighten  natural  water  channels  as 
parts  thereof,  for  the  purpose  of  draining  Ottawa  lake  and  certain 
lands  lying  along  said  ditch  or  drain — said  drain  being  partly  in 
Monroe  and  partly  in  Lenawee  county. 

The  petition  upon  which  the  writ  in  this  case  was  allowed, 
states  that  said  Robertson,  who  was  a  resident  of  the  county  of 
Lenawee.  presented  the  petition  to  tho  judge  of  probate  of  Monroe 
county  for  the  appointment  of  himself  as  such  special  commissioner, 
and  that  no  notice  was  given  to  any  one  by  said  Robertson,  or  the 
judge  of  probate,  of  the  pending  of  the  petition,  or  of  the  time 


598  TAXATION  BY  SPECIAL  ASSESSMENTS. 

and  place  when  a  hearing  would  be  had  upon  the  same,  and  that 
without  any  proof  or  verification  of  the  petition  the  judge  pro- 
ceeded ex  parte  and  made  the  order  appointing  said  Robertson  such 
special  drain  commissioner;  and  that  no  notice  whatever  of  any  pro- 
ceedings in  the  matter  was  given  to  parties  interested,  or  any  other 
order  made  in  the  premises;  and  that  all  the  persons  owning  land 
through  which  it  was  proposed  to  construct  said  drain  had  not  re- 
leased the  right  of  way  nor  their  damages  therefor,  and  that  among 
them  were  several  minors;  that  the  said  Robertson  has  pretended  to 
act  under  the  said  appointment,  and  filed  a  report  of  his  doings  with 
the  county  clerk,  by  which  it  appears  he  has  ascertained  and  deter- 
mined the  cost  of  said  drain,  established  by  him  as  above  stated, 
to  be  $32,361.05  and  that  the  petitioners  had  been  assessed  that 
amount ;  that  said  drain,  as  laid  and  established,  is  for  the  most  part 
if  not  entirely,  on  the  line  of  existing  drains  already  established  by 
the  township  and  county  drain  commissioners.  .  .  . 

The  petitioners  in  the  writ  make  the  following  objections  to  the 
proceedings  of  the  judge  of  probate  and  said  special  drain  commis- 
sioner, viz.:  First,  because  no  notice  was  given  to  the  parties  inter- 
ested of  the  time  and  place  of  hearing  of  said  application  for  the 
appointment  of  said  Robertson. 

Second,  because  there  was  no  evidence  before  said  court  that  the 
applicants  were  freeholders  of  said  counties  of  Monroe  and  Lenawee, 
nor  was  said  application  verified  by  the  oath  of  any  person. 

Third,  that  the  said  order  of  said  court  did  not  require  said  Robert- 
son, in  any  manner,  to  qualify  as  such  officer,  nor  did  said  Robertson 
accept  such  appointment  and  qualify  as  such  officer,  as  required  by 
law. 

Fourth,  because,  without  having  filed  any  oath  or  bond,  as  required 
by  law,  and  without  giving,  any  notice  of  his  contemplated  action 
to  determine  the  necessity  and  practicability  of  the  proposed  drain, 
he  proceeded  to  act  as  such  commissioner,  and  to  attempt  to  estab- 
lish said  drain. 

Fifth,  because  all  persons  owning  lands  on  the  line  of  said  pro- 
posed drain  have  not  released  the  right  of  way  over  their  said  lands, 
nor  their  claims  for  damage  on  account  thereof. 

Sixth,  because1  the  said  Robertson,  as  special  drain  commissioner, 
acting  under  said  pretended  appointment,  has  not  determined  that 
the  proposed  drain  was  necessary  and  practicable.  Nor  have  any 
special  commissioners  been  appointed  and  acted  to  ascertain  the  neces- 
sity of  such  drain,  and  the  taking  of  private  property  for  the  pur- 
pose thereof,  and  the  just  compensation  therefor. 


WHITEFOHD  TOWNSHIP  V.  PROBATE  JUDGE        599 

We  think  these  objections  were  all  well  taken.  The  proceeding^ 
are  all  statutory,  not  according  to  the  course  of  the  common  law, 
and  must  strictly  conform  to  the  statutes  authorizing  them.  Every 
material  requirement  of  the  statute  must  be  observed,  and  the  pro- 
ceedings must  show  affirmatively  on  their  face  a  substantial  compli- 
ance with  the  law.  .  .  . 

The  application  of  the  judge  of  probate  does  not  show  that  the 
persons  who  signed  the  petition  presented  were  resident  freeholders  of 
either  Lenawee  or  Monroe  counties,  and  was  therefore  insufficient;  that 
fact  should  appear  on  the  face  of  the  petition.  This  it  is  which  is 
to  put  the  officer  in  motion,  and  it  is  the  "basis  of  his  authority  to 
enter  upon  the  course  of  proceedings  to  establish  a  water  course  or 
locate  a  ditch. 

No  notice  was  given  to  the  parties  interested  of  the  pendency  of 
the  application  or  proceedings  before  the  judge  of  probate,  or  of  the 
time  and  place  when  the  same  would  be  heard.  Such  a  notice  is 
always  necessary  when  it  is  sought  to  deprive  the  citizen  of  his  prop- 
erty; and  if  the  notice  is  not  expressly  provided  for  in  the  law  itself, 
it  is  in  all  such  cases  necessarily  implied,  and  the  failure  to  give  such 
notice  rendered  the  proceedings,  if  otherwise  regular,  null  and  void. 

The  record  shows  no  proper  adjudication  or  determination  by  any 
person  of  the  necessity  to  make  the  ditch  or  drain  proposed  or  whether 
the  same  was  practicable.  This  is  one  of  the  first  things  to  be  con- 
sidered and  ascertained  in  the  proceedings  to  be  taken,  and  without 
a  compliance  with  this  requirement  no  further  proceedings  can  be 
taken  legally. 

It  is  unnecessary  to  consider  the  proceedings  further.  They  are 
clearly  without  the  authority  of  law,  and  cannot  be  sustained. 

We  have  said  more  than  was  necessary  to  dispose  of  the  questions 
involved  in  this  case,  but  we  have  done  so  with  a  view  that  a  better 
understanding  may  be  had,  both  of  the  statute  and  the  decision  of 
this  Court  already  made  thereunder. 

The  proceedings  in  the  case  must  be  quashed,  and  the  petitioners 
will  recover  their  costs  against  the  respondents. 


GOO  TAXATION  BY  SPECIAL  ASSESSMENTS. 


PARTRIDGE  V.  LUCAS. 

Supreme  Court  of  California.    September,  1893. 
99  California,  519. 

DE  HAVEN,  J.  This  is  an  action  to  recover  upon  a  street  assess- 
ment. In  the  superior  court  a  demurrer  to  the  complaint  was  sus- 
tained, and  judgment  thereupon  rendered  for  defendant.  Plaintiffs 
appeal. 

1.  It  is  well  settled  that  "the  passage  and  publication  of  the  reso- 
lution of  intention  are  acts  by  which  the  board  acquires  jurisdiction ; 
and  by  those  acts  they  acquire  jurisdiction  to  make  only  such  improve- 
ments as  they  described  in  the  resolution,  and  they  cannot,  therefore, 
lawfully  cause  work  other  than  that  which  is  described  to  be  per- 
formed.'' (Beaudry  v.  Valdez,  32  Cal.  276 ;  Himmelman  v.  Satterlee, 
50  Cal.  68.)  The  complaint  alleges  that  the  board  of  trustees  of  the 
town  of  San  Rafael  passed  a  resolution  declaring  it  to  be  the  inten- 
tion of  such  board  to  order  "that  B  Street  ...  be  macadam- 
ized'' ;  and  thereafter,  assuming  to  act  under  such  resolution  of  inten- 
tion, awarded  to  plaintiffs  a  contract  to  macadamize  the  street  men- 
tioned, and  also  to  construct  therein  rock  gutterways,  "formed  by 
laying  flat  stones  even  on  their  upper  surfaces  .  .  .  and  not 
more  than  nine  inches  square  .  .  .  the  stone  to  be  hand  laid 
.  .  .  and  securely  spawled  where  openings  between  the  joists 
occur,"  the  interstices  to  be  filled  "with  clean,  hard  rock,  finely  broken 
and  screened." 

It  is  plain  that  the  work  described  in  the  resolution  of  inten- 
tion did  not  include  the  construction  of  rock  gutterways  in  the  street 
to  be  macadamized,  and  therefore  the  board  of  trustees  did  not,  under 
the  rule  above  stated,  acquire  jurisdiction  to  contract  for  such  gutter- 
ways,  and  the  contract  as  to  these  is  void.  The  word  "macadamize" 
has  a  fixed  and  definite  meaning  and  refers,  not  only  to  the  kind  of 
material  to  be  used  in  covering  a  street  or  road,  but  also  to  the  man- 
ner is  which  it  is  to  be  laid.  It  means  to  cover  a  street  or  road  "by 
the  process  introduced  by  Macadam,  which  consists  of  small  stones 
of  a  uniform  size,  consolidated  and  leveled  by  heavy  rollers."  (13 
Am.  &  Eng.  Enc.  of  Law,  p.  1194.)  The  construction  of  rock  gut- 
terways in  the  manner  described  in  the  contract  awarded  to  plain- 
tiffs is  something  entirely  different  from  the  ordinary  work  of 
macadamizing  the  surface  of  a  street  as  thus  defined;  and,  unless 
expressly  named  and  called  for  in  a  contract,  the  contractor  under- 


PARTRIDGE  V.  LUCAS.  601 

taking  simply  to  macadamize  a  street  would  not  be  required  to  con- 
struct such  gutterways  in  order  to  complete  his  contract;  and, 
although  it  may  be  true  that  in  many  instances  such  gutterways 
•would  be  of  great  benefit  to  streets  paved  with  macadam,  still  this 
fact  would  not  render  their  construction  in  such  streets  any  the 
less  a  distinct  improvement,  and  one  not  to  be  deemed  as  included  in 
a  resolution  of  intention  or  a  contract  to  macadamize  a  street  unless 
particularly  named  in  such  resolution  or  contract.  A  resolution  ol 
intention  to  macadamize  a  street  gives  no  notice  of  an  intention  to 
construct  gutterways  therein  of  any  different  material  than  macadam, 
or  to  be  laid  in  any  different  manner,  or  at  a  greater  cost  per  foot  than 
the  other  portions  of  the  street  between  the  curbing. 

The  case  of  McNamara  v.  Estes,  22  Iowa,  246,  also  cited  by  plain- 
tiff, is  more  nearly  in  point,  and  yet  does  not  decide  the  exact  question 
we  are  now  considering.  In  that  case  it  was  decided  that  under  a 
general  power  to  macadamize  streets,  a  town  might  also  construct 
gutterways,.  and  we  presume  although  it  is  not  so  stated,  rock  gutter- 
ways.  The  court  in  effect  there  held  that  the  power  to  construct  such 
gutterways  was  fairly  embraced  in  the  general  power  to  macadamize, 
and  was  incident  thereto.  The  question  before  us,  however,  arises 
under  a  statute  which,  while  it  confers  power  upon  cities  and  towns 
to  macadamize  streets  and  construct  rock  gutterways  therein,  also 
requires  the  passage  and  publication  of  a  resolution  of  intention 
describing  the  work  intended  to  be  done,  as  a  condition  precedent 
to  the  right  to  enter  into  a  contract  therefor.  The  object  of  this 
statute  is  to  give  notice  to  owners  of  property  who  would  be  affected 
by  the  contemplated  improvement,  in  order  that  they  may  be  heard 
in  opposition  thereto  if  they  desire  (Emery  v.  San  Francisco  Gas  Co. 
28  Cal.  375) ;  and,  while  it  is  not  necessary  that  the  resolution  of 
intention  should  be  as  full  and  minute  as  specifications  contained  in 
a  contract,  still  such  resolution  must  contain  a  general  description 
of  all  that  is  intended  to  be  done;  and  as  rock  gutterways  are  not 
necessarily  any  part  of  the  work  of  macadamizing  a  street,  and  are 
capable'  of  being  easily  described  as  a  separate  and  distinct  part  of 
the  improvement  of  a  street  when  their  construction  is  deemed  neces- 
sary or  proper  in  connection  with  the  macadamization  of  a  street,  they 
must  be  mentioned  in  the  resolution  of  intention  in  order  to  justify 
a  contract  for  their  construction.  The  rule  which  requires  the  board 
of  trustees  or  city  council  to  keep  strictly  within  the  resolution  of 
intention  is  not  a  harsh  -one,  and  a  contractor  ought  certainly  have 
no  difficulty  in  determining  whether  the  work  specified  in  his  contract 


602  TAXATION  BY  SPECIAL  ASSESSMENTS. 

falls  within  the  general  description  of  that  named  in  the  resolution 
of  intention,  and  which  resolution  under  the  statute  is  the  first  and 
necessary  step  to  be  taken  hy  the  town  or  city  in  obtaining  jurisdiction 
to  let  any  contract  for  the  improvement  of  a  street  to  be  paid  for 
by  an  assessment  upon  abutting  property. 

FITZGERALD,   J.,  and   MCFARLAND,   J.,  concurred. 


CHAPTER   XV. 
ENFORCING  OFFICIAL  DUTY. 

Cases  in  this  collection  illustrative  of  the  use  of  the  mandamus  to 
enforce  official  duty  are :  People  v.  Campbell,  93  N.  Y.  196,  to  cancel 
record  of  taxes  on  land  claimed  to  be  exempt  from  taxation ;  People  v. 
Salomon,  46  111.  333,  to  force  obedience  to  orders  of  board  of 
equalization;  People  v.  Supervisors,  51  N.  Y.  401,  the  audit  of  a 
claim  for  repayment  of  taxes  illegally  demanded;  State  v.  New 
Orleans,  37  La.  Ann.  16,  the  levy  of  a  tax  to  pay  a  claim;  State  v. 
Township  Committee,  7  Vroom.  (N.  J.  L.)  66,  the  issue  of  bonds  by 
a  local  corporation;  State  v.  Williston,  20  Wis.  240,  delivery  of  tax 
deed.  See  also  Rees  v.  Watertown,  19  Wallace  (U.  S.),  107. 


60S 


CHAFER  XVI. 

THE  REMEDIES  FOR  WRONGFUL  ACTION  IN  TAX 
PROCEEDINGS. 

I.    REFUNDING  TAXES. 
GARY  V.  CURTIS. 

Supreme  Court  of  the  United  States.    January,  1845. 
3  Howard,  236. 

This  case  came  up  from  the  Circuit  Court  of  the  United  States 
for  the  southern  district  of  New  York,  on  a  certificate  of  division 
between  the  judges  thereof. 

The  action  was  brought  in  the  Circuit  Court  to  recover  money  paid 
to  Curtis,  as  collector  of  the  port  of  New  York,  for  duties 

Mr.  Justice  DANIEL  delivered  the  opinion  of  the  court. 

In  order  to  arrive  at  the  answer  which  should  be  given  to  the  ques- 
tion certified  upon  this  record,  the  objects  first  to  be  sought  for  are 
the  intention  and  meaning  of  Congress  in  the  enactment  of  the  3d 
section  of  the  act  of  March  3d,  1839,  under  which  the  question  sent 
here  has  been  raised.  The  positive  language  of  the  statute,  it  is  true, 
must  control  every  other  rule  of  interpretation,  yet  even  this  may  be 
understood  by  recurrence  to  the  known  public  practice  as  to  matters 
pan  materia,  and  by  the  rules  of  law  as  previously  expounded  by 
the  courts,  and  as  applied  to  and  as  having  influenced  that  practice. 
The  law  as  laid  down  by  this  court  with  respect  to  collectors  of  the 
revenue,  in  the  case  of  Elliott  v.  Swartwout,  10  Peters  137,  and 
again  incidentally  in  the  case  of  Bend  v.  Hoyt,  13  Peters,  263, 
is  precisely  that  which  is  applicable  to  agents  in  private  transactions 
between  man  and  man,  viz. :  that  a  voluntary  payment  to  an  agent 
without  notice  of  objection  will  not  subject  the  agent  who  shall  have 
paid  over  to  his  principal;  but  that  payment  with  notice,  or  with  a 
protest  against  the  legality  of  the  demand,  may  create  a  liability  on 
the  part  of  the  agent  who  shall  pay  over  to  his  principal  in  spite  of 
such  notice  or  protest.  Such  was  the  law  as  announced  from  this 
court,  and  Congress  must  be  presumed  to  have  been  cognizant  of 
its  existence;  and  as  the  peculiar  power  ordained  by  the  Constitution 

604 


GARY  V.  CURTIS.  605 

to  prescribe  rules  of  right  and  of  action  for  all  officers  as  well  as 
others  falling  within  the  legitimate  scope  of  federal  legislation,  they 
must  be  supposed  to  have  been  equally  cognizant  of  the  effects,  and 
tendencies  of  this  court's  decisions  upon  the  collection  of  the  public 
revenue.  With  this  knowledge  necessarily  presumed  for  them,  Con- 
gress enact  the  2d  section  of  the  act  of  1839. 

And  now  let  us  look  at  the  language  of  the  act  of  1839,  c.  82,  §  2. 
"That  from  and  after  the  passage  of  this  act,  all  money  paid  to  any 
collector  of  the  customs,  or  to  any  person  acting  as  such,  for  unas- 
certained duties,  or  for  duties  paid  under  protest  against  the  rate  or 
amount  of  duties  charged,  shall  be  placed  to  the  credit  of  the  treas- 
urer of  the  United  States,  kept  and  disposed  of  as  all  other  money 
paid  for  duties  is  required  by  law,  or  by  regulation  of  the  Treasury 
Department,  to  be  placed  to  the  credit  of  the  treasurer,  kept  and 
disposed  of;  and  it  shall  not  be  held  by  said  collector  or  person  act- 
ing as  such,  to  await  any  ascertainment  of  duties,  or  the  result  of 
any  litigation  in  relation  to  the  rate  or  amount  of  duty  legally 
chargeable  and  collectable  in  any  case  where  money  is  so  paid;  but 
whenever  it  shall  be  shown  to  the  satisfaction  of  the  secretary  of 
the  Treasury,  that  in  any  case  of  unascertained  duties,  or  duties  paid 
under  protest,  more  money  has  been  paid  to  the  collector  or  to  the 
person  acting  as  such,  than  the  law  requires  should  have  been  paid, 
it  shall  be  his  duty  to  draw  his  warrant  on  the  treasurer  in  favor  of 
the  person  or  persons  entitled  to  the  over-payment,  directing  the 
said  treasurer  to  refund  the  same  out  of  any  money  in  the  Treasury 
not  otherwise  appropriated." 

What  is  the  plain  and  obvious  import  of  this  provision,  taking  it 
independently  and  as  a  whole  ?  It  is  that  all  moneys  thereafter  paid 
to  any  collector  for  unascertained  duties,  or  duties  paid  under  pro- 
test, (i.  e.  with  notice  of  objection  by  the  payer)  shall,  notwithstanding 
such  notice,  be  placed  to  the  credit  of  the  treasurer,  kept  and  dis- 
posed of  as  all  other  money  paid  for  duties  is  required  by  law  to  be 
kept  and  disposed  of;  that  is,  they  shall  be  paid  over  by  the  collector, 
received  by  the  treasurer,  and  disbursed  by  him  in  conformity  with 
appropriations  by  law,  precisely  as  if  no  notice  or  protest  had  been 
given  or  made;  and  shall  not  be  retained  by  the  collector  (and  conse- 
quently not  withdrawn  from  the  uses  of  the  government)  to  await 
any  ascertainment  of  duties,  or  the  result  of  any  litigation  relative  to 
the  rate  or  amount  of  duties,  in  any  case  in  which  money  is  so  paid. 

This  section  of  the  act  of  Congress,  considered  independently  and 
as  apart  from  the  facts  and  circumstances  which  are  known  to  have 


606  REMEDIES  FOR  WRONGFUL  ACTION. 

/ 

preceded  it,  and  may  fairly  be  supposed  to  have  induced  its  enact- 
ment, must  be  understood  as  leaving  with  the  collector  no  lien  upon, 
or  discretion  over,  the  sums  received  by  him  on  account  of  the  duties 
described  therein;  but  as  converting  him  into  the  mere  bearer  of 
those  sums  to  the  Treasury  of  the  United  States,  through  the  presiding 
officer  of  which  department  they  were  to  be  disposed  of  in  conformity 
with  the  law.  Looking  then  to  the  immediate  operation  of  this 
section  upon  the  conclusions  either  directly  announced  or  as  implied 
in  the  decision  of  Elliott  v.  Swartwout,  how  are  those  conclusions 
affected  by  it?  They  must  be  influenced  by  consequences  like  the 
following:  That  whereas  by  the  decision  above  mentioned  it  is 
assumed  that  by  notice  to  the  collector,  or  by  protest  against  payment, 
a  personal  liability  for  the  duties  actually  paid,  attaches  upon,  and 
that  for  his  protection  a  correspondent  right  of  retainer  is  created 
on  his  part;  it  is  thereby  made  known  (i.  e.  by  the  statute)  that  under 
no  circumstances  in  future  should  the  revenue  be  retained  in  the 
hands  of  the  collector;  that  he  should  in  no  instance  be  regarded  by 
those  making  payments  to  him  as  having  a  lien  upon  it,  because  he 
is  announced  to  be  the  mere  instrument  or  vehicle  to  convey  the 
duties  paid  into  his  hands  into  the  Treasury;  that  it  is  the  secre- 
tary of  the  Treasury  alone  in  whom  the  rights  of  the  government 
and  of  the  claimant  are  to  be  tested ;  and  that  whoever  shall  pay  to  a 
collector  any  money  for  duties,  must  do  so  subject  to  the  consequences 
herein  declared.  Such,  from  the  3d  day  of  March,  1839,  was  the 
public  law  of  the  United  States;  it  operated  as  notice  to  every  one; 
it  applied  of  course  to  every  citizen  as  well  as  to  officers  concerned 
in  the  regulation  of  the  revenue;  and  as  it  removed  the  implications 
on  which  the  decision  in  Elliott  v.  Swartwout  materially  rested,  that 
case  cannot  correctly  control  a  question  arising  under  a  different 
state  of  the  law,  and  under  a  condition  of  the  parties  also  essentially 
different. 

It  is  contended,  however,  that  tho  language  and  the  purposes  of  Con- 
gress, if  really  what  we  hold  them  to  be  declared  in  the  statute  of  1839, 
cannot  be  sustained,  because  they  would  be  repugnant  to  the  Consti- 
tution, inasmuch  as  they  would  debar  the  citizen  of  his  right  to 
resort?  to  the  courts  of  justice.  The  supremacy  of  the  Constitution 
over  all  officers  and  authorities,  both  of  the  federal  and  state  gov- 
ernments, and  the  sanctity  of  the  rights  guaranteed  by  it,  none  will 
question.  These  are  concessa  on  all  sides.  The  objection  above 
referred  to  admits  of  the  most  satisfactory  refutation.  This  may 
be  found  in  the  following  position,  familiar  in  this  and  most  other 


GARY  V.  CURTIS.  607 

governments,  viz. :  that  the  government,  as  a  general  rule,  claims 
an  exemption  from  being  sued  in  its  own  courts.  That  although,  as 
being  charged  with  the  administration  of  the  laws,  it  will  resort  to 
those  courts  as  a  means  of  securing  this  great  end,  it  will  not  permit 
itself  to  be  impleaded  therein,  save  in  instances  forming  conceded  and 
express  exceptions.  Secondly,  in  the  doctrine  so  often  ruled  in  this 
court,  that  the  judicial  power  of  the  United  States,  although  it  has  its 
origin  in  the  Constitution,  is  (except  in  enumerated  instances,  applica- 
ble exclusively  to  this  court)  dependent  for  its  distribution  and  organ- 
ization, and  for  the  modes  of  its  exercise,  entirely  upon  the  action  of 
Congress,  who  possess  the  sole  power  of  creating  the  tribunals  (inferior 
to  the  Supreme  Court)  for  the  exercise  of  the  judicial  power,  and 
with  investing  them  with  jurisdiction  either  limited,  concurrent  or 
exclusive,  and  of  withholding  jurisdiction  from  them  in  the  exact 
degrees  and  character  which  to  Congress  may  seem  proper  to  the 
public  good.  To  deny  this  position  would  be  to  elevate  the  judicial 
over  the  legislative  branch  of  the  government,  and  to  give  to  the 
former  powers  limited  by  its  own  discretion  merely.  It  follows, 
then,  that  the  courts  created  by  statute  must  look  to  the  statute  as 
the  warrant  for  their  authority;  certainly  they  cannot  go  beyond  the 
statute  and  assert  an  authority  with  which  they  may  not  be  in- 
vested by  it,  or  which  may  be  clearly  denied  to  them.  This  argu- 
ment is  in  no  wise  impaired  by  admitting  that  the  judicial  power 
shall  extend  to  all  cases  arising  under  the  Constitution  and  laws  of 
the  United  States.  Perfectly  consistent  with  such  an  admission  is 
the  truth,  that  the  organization  of  the  judicial  power,  the  definition 
and  distribution  of  the  subjects  of  jurisdiction  in  the  federal  trib- 
unals, and  the  modes  of  their  action  and  authority,  have  been,  and 
of  right  must  be,  the  work  of  the  legislature.  The  existence  of  the 
Judicial  Act  itself,  with  its  several  supplements,  furnishes  proof  un- 
answerable on  this  point.  The  courts  of  the  United  States  are  all 
limited  in  their  nature  and  constitution,  and  have  not  the  powers 
inherent  in  courts  existing  by  prescription  or  by  the  common  law. 
In  devising  a  system  for  imposing  and  collecting  the  public 
revenue,  it  was  competent  for  Congress  to  designate  the  officer  of  the 
government  in  whom  the  rights  of  that  government  should  be  repre- 
sented in  any  conflict  which  might  arise,  and  to  prescribe  the  manner 
of  trial.  It  is  not  imagined  that  by  so  doing,  Congress  is  justly  charge- 
able with  usurpation,  or  that  the  citizen  is  thereby  deprived  of  his 
rights.  There  is  nothing  arbitrary  in  such  arrangements;  they  are 
general  in  their  character;  are  the  result  of  principles  inherent  in 
the  government;  are  defined  and  promulgated  as  the  public  law. 


608  REMEDIES  FOR  WRONGFUL  ACTION. 

A  more  striking  example  of  the  powers  exerted  by  the  government,  in 
relation  to  its  fiscal  concerns,  than  is  seen  in  the  act  of  1839,  is  the 
power  of  distress,  and  sale,  authorized  by  the  act  of  Congress  of  May 
15,  1820,  (3  Story,  1791)  upon  adjustments  of  accounts  by  the  first 
comptroller  of  the  Treasury.  This  very  strong  and  summary  pro- 
ceeding has  now  been  in  practice  for  nearly  a  quarter  of  a  century, 
without  its  regularity  having  been  questioned,  so  far  as  is  known  to 
the  court.  The  courts  of  the  United  States  can  take  cognizance  only 
of  subjects  assigned  to  them  expressly  or  by  necessary  implication; 
a  fortiori,  they  can  take  no  cognizance  of  matters  that  by  law  are 
either  denied  to  them  or  expressly  referred  ad  aliud  examen. 

But  whilst  it  has  been  deemed  proper,  in  examining  the  question 
referred  to  by  the  Circuit  Court,  to  clear  it  of  embarrassments  with 
which,  from  its  supposed  connection  with  the  Constitution,  it  is 
thought  to  be  environed,  this  court  feel  satisfied  that  such  embarrass- 
ments exist  in  imagination  only  and  not  in  reality;  that  the  case  and 
the  question  now  before  them  present  no  interference  with  the  Con- 
stitution in  any  one  of  its  provisions,  and  may  be,  and  should  be  dis- 
posed of  on  the  plainest  principles  of  common  right. 

We  have  thus  stated,  and  will  here  recapitulate,  the  principles 
upon  which  the  action  for  money  had  and  received  may  be  main- 
tained. They  are  these:  1st.  Whenever  the  defendant  has  received 
money  which  is  the  property  of  the  plaintiff,  and  which  the  defendant 
is  obliged,  by  the  ties  of  natural  justice  and  equity,  to  refund.  2dly. 
In  the  case  of  an  agent,  where  such  agent  is  not  notoriously  the  mere 
carrier  or  instrument  for  transferring  the  fund,  but  has  the  power  of 
retaining,  and  before  he  has  paid  over  has  received  notice  of  the 
plaintiff's  claim,  and  a  warning  not  to  part  with  the  fund.  3dly. 
Where  there  exists  a  privity  between  the  plaintiff  and  the  defendant. 
Let  the  case  before  us  be  brought  to  the  test  of  these  rules.  The 
2d  section  of  the  act  of  Congress  declares,  first,  that  from  its  passage, 
all  money  paid  to  any  collector  of  the  customs  for  unascertained 
duties,  or  duties  paid  under  protest  against  the  rate  or  amount  of  the 
duties  charged,  shall  be  placed  to  the  credit  of  the  treasurer,  to  be 
kept  and  applied  as  all  other  money  paid  for  duties  required  by  law. 
Secondly,'  that  they  shall  not  be  held  by  the  collector  to  await  any 
ascertainment  of  duties,  or  the  result  of  any  litigation,  concerning  the 
rate  or  amount  of  duty  legally  chargeable  or  collectable.  And  thirdly, 
that  in  all  cases  of  dispute  as  to  the  rate  of  duties,  application  shall 
be  made  to  the  secretary  of  the  Treasury,  who  shall  direct  the  repay- 
ment of  any  money  improperly  charged.  This  section,  as  a  part  of  the 


GARY  V.  CURTIS.  609 

public  law,  must  be  taken  as  notice  to  all  revenue  officers,  and  to 
all  importers  and  others  dealing  with  those  officers  in  the  line  of  their 
duty.  There  is  nothing  obscure  or  equivocal  in  this  law.  It  declares 
to  every  one  subject  to  the  payment  of  duties,  the  disposition  which 
shall  be  made  of  all  payments  in  future  to  collectors ;  tells  them  those 
officers  shall  have  no  discretion  over  money  received  by  them,  and 
especially  that  they  shall  never  retain  it  to  await  the  result  of  any 
contest  concerning  the  right  to  it;  and  that  quoad  this  money  the 
statute  has  converted  those  officers  into  mere  instruments  for  its 
transfer  to  the  Treasury.  With  full  knowledge  thus  imparted  by  the 
law,  can  it  be  correctly  understood  that  the  party  making  payment 
can,  ex  equo  et  bono,  recover  against  the  officer  for  acting  in  literal 
conformity  with  the  law,  converting  thereby  the  performance  of  his 
duty  into  an  offence;  or  that  upon  principles  of  equity  and  good  con- 
science, an  obligation  and  a  promise  to  refund  shall  be  implied  against 
the  express  mandate  of  the  law?  Such  a  presumption  appears  to  us 
to  be  subversive  of  every  rule  of  right.  The  more  correct  inference 
seems  to  be,  that  payment  under  such  circumstances  must,  ex  equo  et 
bono,  nay,  ex  necessitate,  and  in  spite  of  objection  made  at  the  time, 
be  taken  as  made  in  conformity  with  the  mandate  of  the  law  and  the 
duty  of  the  officer,  which  exclude  not  only  any  implied  promise  of 
repayment  by  the  officer,  but  would  render  void  an  express  promise 
by  him,  founded  upon  violation  of  both  the  law  and  his  duty.  The 
claimant  had  his  option  to  refuse  payment,  the  retention  of  the  goods 
for  the  adjustment  of  duties,  being  an  incident  of  probable  occurrence, 
to  avoid  this  it  could  not  be  permitted  to  effect  the  abrogation  of  a 
public  law,  or  a  system  of  public  policy  essentially  connected  with  the 
general  action  of  the  government.  The  claimant,  moreover,  was  not 
without  other  means  of  redress,  had  he  chosen  to  adopt  them.  He 
might  have  asserted  his  right  to  the  possession  of  the  goods,  or  his 
exemption  from  the  duties  demanded,  either  by  replevin  or  in  an 
action  of  detinue,  or  perhaps  by  an  action  of  trover,  upon  his  tender- 
ing the  amount  of  duties  admitted  by  him  to  be  legally  due.  The 
legitimate  inquiry  before  the  court  is  not  whether  all  right  of  action 
had  been  taken  away  from  the  party,  and  the  court  responds  to  no 
euch  inquiry.  The  question  presented  for  decision,  and  the  only 
question  decided,  is  whether,  under  the  notice  given  by  the  statute 
of  1839,  payments  made  in  spite  of  that  notice,  though  with  a  protest 
against  their  supposed  illegality,  can  constitute  a  ground  for  that 
implied  obligation  to  refund,  and  for  that  promise  inferred  by  the 
law  from  such  obligation  which  are  inseparable  from,  and  indeed 
are  the  only  foundation  of,  a  right  of  recovery  in  this  particular 
39 


610  REMEDIES  FOR  WRONGFUL  ACTION. 

form  of  action.  And  here  is  presented  the  answer  to  the  assertion, 
that  by  the  act  of  1839,  or  by  the  construction  given  to  it  by  this 
court,  the  party  is  debarred  all  access  to  the  courts  of  justice,  and 
left  entirely  at  the  mercy  of  an  executive  officer.  Neither  have  Con- 
gress nor  this  court  furnished  the  slightest  ground  for  the  above 
assertion. 

We  deem  it  unnecessary  to  examine  farther  the  grounds  stated  in 
the  second  and  third  heads  of  inquiry,  as  forming  the  foundation  of 
the  action  for  money  had  and  received;  or  to  bring  to  a  particular 
comparison  with  those  grounds  the  law  and  the  facts  of  this  case,  as 
presented  upon  the  record.  The  illustrations  given  under  the  first 
head  embrace  all  that  is  important  under  the  remaining  divisions, 
with  respect  to  the  nature  of  the  demand  and  the  position  of  the 
parties.  Those  illustrations  establish,  in  the  view  of  the  court,  that, 
so  far  is  the  defendant  from  being  obliged,  by  the  ties  of  natural 
equity  and  justice,  to  refund  to  the  plaintiff  the  money  received  for 
duties,  that,  on  the  contrary,  under  that  notice  of  the  law,  which  all 
must  be  presumed  to  possess,  the  payment  must  be  understood  as 
having  been  made  with  knowledge  of  the  partiesi  that  the  right  of 
retaining  or  of  refunding  the  money  did  not  exist  in  the  defendant; 
that  the  money  by  law  must  pass  from  him  immediately  upon  its 
receipt;  that  payment  to  him  was  in  legal  effect  payment  into  the 
Treasury;  that  notice  to  him  was,  under  such  circumstances,  of  no 
effect  to  bind  him  to  refund;  that  as  the  collector,  since  the  stat- 
ute, had  power  neither  to  retain  nor  refund,  there  could,  as  between 
him  and  the  plaintiff,  arise  no  privity  nor  implication,  on  which  to 
found  the  promise  raised  by  the  law,  only  where  an  obligation  to 
undertake  or  promise  exists;  and  that,  therefore,  the  action  for  money 
had  and  received  could  not,  in  this  case,  be  maintained,  but  was  barred 
by  the  act  of  Congress  of  1839. 

Mr.  Justice  STORY. 

I  regret  exceedingly  being  compelled  by  a  sense  of  duty  to  express 
openly  my  dissent  from  the  opinion  of  a  majority  of  the  court  in 
this  case. 


DE  LIMA  V.  BIDWELL.  611 


DE  LIMA  V.  BIDWELL. 

Supreme  Court  of  the  United  States.    October,  1900. 
182  United  States,  1. 

This  was  an  action  originally  instituted  in  the  Supreme  Court  of 
the  State  of  Xe\v  York  by  the  firm  of  D.  A.  De  Lima  &  Co.  against 
the  collector  of  the  port  of  Xew  York,  to  recover  back  duties  alleged  to 
have  been  illegally  exacted  and  paid  under  protest,  upon  certain 
importations  of  sugar  from  San  Juan  in  the  island  of  Porto  Rico, 
during  the  autumn  of  1899,  and  subsequent  to  the  cession  of  the 
island  to  the  United  States. 

Upon  the  petition  of  the  collector,  and  pursuant  to  Rev.  Stat.  sec. 
643,  the  case  was  removed  by  certiorari  to  the  Circuit  Court  of  the 
United  States,  in  which  the  defendant  appeared  and  demurred  to 
the  complaint  upon  the  ground  that  it  did  not  state  a  cause  of  action, 
and  also  that  the  court  had  no  jurisdiction  of  the  case.  The  demur- 
rer was  sustained  upon  both  grounds,  and  the  action  dismissed.  Hence 
this  writ  of  error. 

BROWN,  J.,  delivered  the  opinion  of  the  Court. 

This  case  raises  the  single  question  whether  territory  acquired  by 
the  United  States  by  cession  from  a  foreign  power  remains  a  "for- 
eign country"  within  the  meaning  of  the  tariff  laws. 

1.  .  .  .  By  Rev.  Stat.  sec.  2931,  it  was  enacted  that  the  deci- 
sion of  the  collector  "as  to  the  rate  and  amount  of  duties"  to  be  paid 
upon  imported  merchandise  should  be  final  and  conclusive,  unless 
the  owner  or  agent  entered  a  protest,  and  within  thirty  days  appealed 
therefrom  to  the  Secretary  of  the  Treasury;  and,  further,  that  the 
decision  of  the  Secretary  should  be  final  and  conclusive,  unless  suit 
were  brought  within  ninety  days  after  the  decision  of  the  Secretary. 
By  Rev.  Stat.  sec.  3011,  any  person  having  made  payment  under  such 
protest  was  given  the  right  to  bring  an  action  at  law  and  recover  back 
any  excess  of  duties  so  paid. 

The  law  stood  in  this  condition  until  June  10,  1890,  when  an  act 
known  as  the  Customs  Administrative  Act  was  passed,  26  Stat.  131, 
c.  407,  by  which  the  above  sections  Rev.  Stat.  sees.  2931,  3011,  were 
repealed  and  new  regulations  established,  by  which  an  appeal  was 
given  from  the  decision  of  the  collector  "'as  to  the  rate  and  amount 
of  the  duties  chargeable  upon  imported  merchandise,"  if  such  duties 
were  paid  under  protest,  to  a  Board  of  General  Appraisers,  whose 
decision  should  be  final  and  conclusive  (sec.  14)  "as  to  the  construe- 


612  REMEDIES  FOR  WRONGFUL  ACTION. 

tion  of  the  law  and  the  facts  respecting  the  classification  of  such  mer- 
chandise and  the  rate  "of  duties  imposed  thereon  under  such  classifi- 
cation," unless  within  thirty  days  one  of  the  parties  applied  to  the 
Circuit  Court  of  the  United  States  for  a  review  of  the  questions  of 
law  and  fact  involved  in  such  decision.  Sec.  15.  It  was  further  pro- 
vided that  the  decision  of  such  court  should  be  final,  unless  the  court 
were  of  the  opinion  that  the  question  involved  was  of  such  importance 
as  to  require  a  review  by  this  court,  which  was  given  power  to  affirm, 
modify  or  reverse  the  decision  of  the  Circuit  Court. 

The  effect  of  the  Customs  Administrative  Act  was  considered  by 
this  court  in  In  re  Fassett,  Petitioner,  142  U.  S.  479,  in  which  we 
held  that  the  decision  of  the  collector  that  a  yacht  was  an  imported 
article  might  be  reviewed  upon  a  libel  for  possession  filed  by  the 
owner,  notwithstanding  the  Customs  Administrative  Act.  It  was  held 
that  the  review  of  the  decision  of  the  Board  of  General  Appraisers, 
provided  for  by  section  fifteen  of  that  act,  was  limited  to  decisions 
of  the  Board  "as  to  the  construction  of  the  law  and  the  facts  respect- 
ing the  classification"  of  imported  merchandise  "and  the  rate  of  duties 
imposed  thereon  under  such  classification,"  and  that  it  did  not  bring 
up  for  review  the  question  whether  an  article  be  imported  merchandise 
or  not,  nor,  under  section  fifteen,  is  the  ascertainment  of  that  fact 
such  a  decision  as  is  provided  for.  Said  Mr.  Justice  Blatchford: 
"Nor  can  the  court  of  review  pass  upon  any  question  which  the  col- 
lector had  not  original  authority  to  determine.  The  collector  has  no 
authority  to  make  any  determination  regarding  any  article  which  is 
not  imported  merchandise;  and  if  the  vessel  in  question  here  is  not 
imported  merchandise,  the  court  of  review  would  have  no  jurisdiction 
to  determine  any  matter  regarding  that  question,  and  could  not  deter- 
mine the  very  fact  which  is  in  issue  under  the  libel  in  the  District 
Court,  on  which  the  rights  of  the  libellant  depend." 

"Under  the  Customs  Administrative  Act,  the  libellant,  in  order 
to  have  the  benefit  of  the  proceedings  thereunder,  must  concede  that 
the  vessel  is  imported  merchandise,  which  is  the  very  question  put  in 
contention  under  the  libel,  and  must  make  entry  of  her  as  imported 
merchandi?e,  with  an  invoice  and  consular  certificate  to  that  effect." 
It  was  held  that  the  libel  was  properly  filed. 

The  question  involved  in  this  case  is  not  whether  the  sugars  were 
importable  articles  under  the  tariff  laws,  but  whether,  coming  as 
they  did  from  a  port  alleged  to  be  domestic,  they  were  imported  from 
a  foreign  country — in  other  words,  whether  they  were  imported  at  all 
as  that  word  is  defined  in  Woodruff  v.  Parham,  8  Wall.  123,  132.  We 
think  the  decision  in  the  Fassett  case  is  conclusive  to  the  effect  that, 


DE  LIMA  V.  BIDWELL.  613 

if  the  question  be  whether  the  sugars  were,  imported  or  not,  such 
question  could  not  be  raised  before  the  Board  of  General  Appraisers; 
and  that  whether  they  were  imported  merchandise  for  the  reasons 
given  in  the  Fassett  case  that  a  vessel  is  not  an  importable  article,  or 
because  the  merchandise  was  not  brought  from  a  foreign  country,  is 
immaterial.  In  either  case  the  article  is  not  imported. 

Conceding  then  that  section  3011  has  been  repealed,  and  that  no 
remedy  exists  under  the  Customs  Administrative  Act,  does  it  follow 
that  no  action  whatever  will  lie  ?  If  there  be  an  admitted  wrong,  the 
courts  will  look  far  to  supply  an  adequate  remedy.  If  an  action  lay 
at  common  law  the  repeal  of  sections  2931  and  3011,  regulating  the 
proceedings  in  customs  cases,  (that  is,  turning  upon  the  classification 
of  merchandise,)  to  make  way  for  another  proceeding  before  the  Board 
of  General  Appraisers  in  the  same  class  of  cases,  did  not  destroy  any 
right  of  action  that  might  have  existed  as  to  other  than  customs  cases ; 
and  the  fact  that  by  section  25  no  collector  shall  be  liable  "for  or  on 
account  of  any  rulings  or  decisions  as  to  the  classification  of  such 
merchandise  or  the  duties  charged  thereon,  or  the  collection  of  any 
dues,  charges  or  duties  on  or  on  account  of  any  such  merchandise," 
or  any  other  matter  which  the  importer  might  have  brought  before  the 
Board  of  General  Appraisers,  does  not  restrict  the  right  which  the 
owner  of  the  merchandise  might  have  against  the  collector  in  cases 
not  falling  within  the  Customs  Administrative  Act.  If  the  position 
of  the  government  be  correct,  the  plaintiff  would  be  remediless; 
and  if  a  collector  should  seize  and  hold  for  duties  goods  brought  from 
New  Orleans,  or  any  other  concededly  domestic  port,  to  New  York, 
there  would  be  no  method  of  testing  his  right  to  make  such  seizure. 
It  is  hardly  possible  that  the  owner  could  be  placed  in  this  position. 
But  we  are  not  without  authority  on  this  point. 

The  case  of  Elliott  v.  Swartwout,  10  Pet.  137,  154,  was  an  action 
of  assumpsit  against  the  collector  of  the  Port  of  New  York  to  re- 
cover certain  duties  upon  goods  alleged  to  have  been  improperly  classi- 
fied. It  was  held  that  as  the  payment  was  purely  voluntary,  by  a 
mutual  mistake  of  law,  no  action  would  lie  to  recover  them  back,  al- 
though it  would  have  been  different  if  they  had  been  paid  under  pro- 
test. Said  Mr.  Justice  Thompson :  "Here,  then,  is  the  true  decision : 
when  the  money  is  paid  voluntarily  and  by  mistake  to  the  agent,  and 
he  has  paid  it  over  to  his  principal,  he  cannot  be  made  personally  re- 
sponsible; but  if,  before  paying  it  over,  he  is  apprised  of  the  mis- 
take, and  required  not  to  pay  it  over,  he  is  personally  liable."  If 
the  payment  of  the  money  be  accompanied  by  a  notice  to  the  collector 
that  the  duties  charged  are  too  high,  and  that  the  person  paying  in- 


614  REMEDIES  FOR  WRONGFUL  ACTION. 

tends  to  sue  to  recover  back  the  amount  erroneously  paid,  it  was  held 
the  such  action  must  lie  "unless  the  hroad  proposition  can  be  main- 
tained, that  no  action  will  lie  against  a  collector  to  recover  back  an 
excess  of  duties  paid  him,  but  that  recourse  must  be  had  to  the  Gov- 
ernment for  redress."  The  case  recognized  the  fact  that,  with  respect 
to  money  paid  under  a  mistake  of  law,  the  collector  stood  in  the  posi- 
tion of  an  ordinary  agent  and  could  be  made  personally  liable  in  case 
the  money  were  paid  under  protest. 

This  decision  was  made  in  1836.  Apparently  in  consequence  of  it 
an  act  was  passed  in  1839  requiring  moneys  collected  for  duties  to 
be  deposited  to  the  credit  of  the  Treasurer  of  the  United  States ;  and 
it  was  made  the  duty  of  the  Secretary  of  the  Treasury  to  draw  his 
warrant  upon  the  Treasurer  in  case  he  found  more  money  had  been 
paid  to  the  collector  than  the  law  required.  It  was  held  by  a  majority 
of  this  court  in  Gary  v.  Curtis,  3  How.  236,  that  this  act  precluded 
an  action  of  assumpsit  for  money  had  and  received  against  the  col- 
lector for  duties  received  by  him,  and  that  the  act  of  1839  furnished 
the  sole  remedy.  It  was  said  of  that  case  in  Arnson  v.  Murphy,  109 
U.  S.  238,  240 :  "Congress,  being  in  session  at  the  time  the  decision 
was  announced,  passed  the  explanatory  act  of  February  26,  1845, 
which,  by  legislative  construction  of  the  act  of  1839,  restored  to  the 
claimant  his  right  of  action  against  the  collector,  but  required  the 
protest  to  be  made  in  writing  at  the  time  of  payment  of  the  duties 
alleged  to  have  been  illegally  exacted,  and  took  from  the  Secretary  of 
the  Treasury  the  authority  to  refund  conferred  by  the  act  of  1839. 
5  Stat.  349,  727.  This  act  of  1845  was  in  force,  as  was  decided  in 
Barney  v.  Watson,  92  U.  S.  449,  imtil  repealed  by  implication  by  the 
act  of  June  30,  1864,"  c.  171,  13  Stat.  202,  214,  carried  into  the 
Revised  Statutes  as  sections  2931  and  3011.  In  the  same  case  of 
Arnson  v.  MurpJiy,  109  U.  S.  238,  it  was  decided  that  the  common  law 
right  of  action  against  the  collector  to  recover  back  duties  illegally 
collected  was  taken  away  by  statute,  and  a  remedy  given,  based  upon 
these  sections,  which  was  exclusive.  The  decision  in  Elliot  v.  Swart- 
wout  was  recognized,  but  so  far  as  respected  customs  cases  (i.  e.  classi- 
fication cases)  was  held  to  be  superseded  by  the  statutes.  So  in 
Schoenfeld  v.  Hendriclcs,  152  U.  S.  691,  it  was  held  that  an  action 
could  not  be  maintained  against  the  collector,  either  at  common  law 
or  under  the  statutes,  to  recover  duties  alleged  to  have  been  exacted, 
in  1892,  upon  an  importation  of  merchandise,  the  remedy  given 
through  the  Board  of  General  Appraisers  being  exclusive. 

The  criticism  to  be  made  upon  the  applicability  of  these  cases  is, 
that  they  dealt  only  with  imported  merchandise  and  with  duties  col- 


DE  LIMA  V.  BIDWELL.  615 

lected  thereon,  and  have  no  reference  whatever  to  exactions  made  by  a 
collector,  under  color  of  the  revenue  laws,  upon  goods  which  have 
never  been  imported  at  all.  With  respect  to  these  the  collector  stands 
as  if,  under  color  of  his  office,  he  had  seized  a  ship  or  its  equipment, 
or  any  other  article  not  comprehended  within  the  scope  of  the  tariff 
laws.  Had  the  sugars  involved  in  this  case  been  admittedly  imported, 
that  is,  brought  into  Xew  York  from  a  confessedly  foreign  country, 
and  the  question  had  arisen  whether  they  were  dutiable,  or  belonged  to 
the  free  list,  the  case  would  have  fallen  within  the  Customs  Admin- 
istrative Act,  since  it  would  have  turned  upon  a  question  of  classifi- 
cation. 

The  fact  that  the  collector  may  have  deposited  the  money  in  the 
Treasury  is  no  bar  to  a  judgment  against  him,  since  Kev.  Stat.  sec. 
989  provides  that,  in  case  of  a  recovery  of  any  money  exacted  by  him 
and  paid  into  the  Treasury,  if  the  court  certifies  that  there  was  prob- 
able cause  for  the  act  done,  no  execution  shall  issue  against  him,  but 
the  amount  of  the  judgment  shall  be  paid  out  of  the  proper  appro- 
priation from  the  Treasury. 

We  are  not  impressed  by  the  argument  that,  if  the  plaintiffs  in- 
sisted that  these  sugars  were  not  imported  merchandise,  they  should 
have  stood  upon  their  rights,  refused  to  enter  the  goods,  and  brought 
an  action  of  replevin  to  recover  their  possession.  It  is  true  that,  to 
prevent  the  seizure  of  the  sugars,  plaintiffs  did  enter  them  as  im- 
ported merchandise ;  but  any  admission  derivable  from  that  fact  is  ex- 
plained by  their  protest  against  the  exaction  of  duties  upon  them 
as  such.  They  waived  nothing  by  taking  this  course.  The  collector 
lost  nothing,  since  he  was  apprised  of  the  course  they  would  probably 
take.  It  is  true  that  in  the  Fassett  Case,  142  U.  S.  479,  the  proceed- 
ing was  by  libel  for  possession  of  the  vessel,  which  is  analogous  to 
an  action  of  replevin  at  common  law;  but  it  would  appear  that  Rev. 
Stat.  sec.  934  would  stand  in  the  way  of  such  a  remedy  here,  since  by 
that  section  "all  property  taken  or  detained  by  any  officer  or  other 
person  under  authority  of  any  revenue  law  of  the  United  States  shall 
be  irrepleviable,  and  shall  be  deemed  to  be  in  the  custody  of  the  law 
and  subject  only  to  the  orders  and  decrees  of  the  courts  of  the  United 
States  having  jurisdiction  thereof."  If  the  words  "under  authority 
of  any  revenue  law"  are  to  be  construed  as  if  they  read  "under  color 
of  any  revenue  law,"  it  would  seem  that  these  sugars  could  not  be 
made  the  subject  of  a  replevin;  but  even  conceding  that  replevin 
would  lie,  we  consider  it  merely  a  choice  of  remedies,  and  that  the 
plaintiffs  were  at  liberty  to  waive  the  tort  and  proceed  in  assumpsit. 
We  are  all  of  the  opinion  that  this  action  was  properly  brought. 


616  REMEDIES  FOR  WRONGFUL  ACTION. 


WRIGHT  V.  BLAKESLEE. 

Supreme  Court  of  the  United  States.     October,  1879. 
101  United  States,  175. 

MR.  JUSTICE  BRADLEY  delivered  the  opinion  of  the  court. 

This  is  an  action  brought  by  B.  Huntington  Wright,  the  plaintiff 
in  error,  against  Blakeslee,  the  defendant,  formerly  collector  of  inter- 
nal revenue  for  the  twenty-first  revenue  district  of  New  York,  to  re- 
cover the  amount  of  a  succession  tax  collected  from  the  plaintiff  and 
his  sister  in  1867,  the  latter  having  assigned  her  interest  to  the 
plaintiff. 

The  assessment  or  tax,  with  the  penalty,  was  placed  upon  the  assess- 
ment roll,  and  delivered  to  the  collector  (the  defendant)  for  collec- 
tion, and  he  notified  the  parties  to  pay  the  tax. 

On  the  31st  of  July,  1867,  the  parties  paid  the  tax  under  protest, 
the  tax  paid  amounting  to  $595.59,  of  which  $389.56  was  tax,  $194.78 
was  penalty,  and  $11.25  was  the  expenses  for  making  the  assessment 
and  valuation.  The  amount  assessed  upon  each,  viz.  B.  Huntington 
Wright  and  Henrietta  H.  Wright,  was  $297.29. 

On  the  5th  of  October,  1872,  the  Commissioner  of  Internal  Revenue 
wrote  the  parties  that  the  claim  to  have  the  tax  refunded  had  not  been 
submitted  to  the  department,  and  forwarded  them  a  blank  to  be  filled 
up  and  transmitted  to  the  department,  and  they  would  then  pass 
upon  the  case  upon  its  merits. 

About  the  3d  of  January,  1873,  the  appeal  was  perfected  and  filed 
with  the  commissioner. 

On  the  3d  of  July,  1873,  the  commissioner  rendered  his  decision 
upon  the  merits,  rejecting  the  whole  claim,  and  gave  notice  thereof. 

On  the  15th  of  June,  1875,  Henrietta  D.  Wright,  one  of  the  parties 
against  whom  one-half  of  the  tax  had  been  levied  and  collected,  trans- 
ferred her  claim  to  the  plaintiff. 

On  the  same  day  a  summons  was  delivered  to  the  sheriff  of  New 
York  to  serve  on  defendant. 

On  the  24th  of  June,  1875,  the  summons  was  actually  served  on 
defendant.  The  action  was  originally  brought  in  the  State  court,  but 
was  removed  into  the  Circuit  Court  of  the  United  States,  upon  pro- 
ceedings had  under  the  statute. 

Upon  these  facts  the  court  decided,  as  matter  of  law,  that  the  tax 
and  penalty  were  properly  assessed  and  collected,  and  that  the  plaintiff 
ought  not  to  recover. 


WRIGHT   V.   BLAKESLEE.  617 

There  is,  therefore,  no  doubt  of  the  plaintiff's  right  to  recover  the 
amount  of  this  penalty,  if,  when  paid,  the  protest  against  its  exaction 
was  sufficient. 

On  this  point  it  is  to  be  observed  that  the  case  stands  on  a  different 
ground  from  that  of  the  illegal  exaction  of  duties  on  imports.  To 
recover  these,  the  statute  makes  it  necessary  that  the  party  interested 
should  give  notice  in  writing  to  the  collector,  if  dissatisfied  with  his 
decision,  setting  forth  distinctly  and  specifically  the  grounds  of  his 
objection  thereto.  Act  of  June  30,  1864,  sect.  14;  13  Stat.  214;  Rev. 
Stat.,  sect.  2931;  Westray  v.  United  States,  18  Wall.  322;  Barney, 
Collector,  v.  Watson  et  al,  92  U.  S.  449 ;  Davies  v.  Arthur,  96  id.  148. 
Xo  such  written  notice  or  protest  is  required  of  a  party  paying  illegal 
taxes  under  the  internal  revenue  laws.  He  must  pay  under  protest  in 
some  form,  it  is  true,  or  his  payment  will  be  deemed  voluntary.  City 
of  Philadelphia  v.  The  Collector,  5  Wall.  720;  The  Collector  v.  Hub- 
bard,  12  id.  1.  But  whilst  a  written  protest  would  in  all  cases  be  most 
convenient,  there  is  no  statutory  requirement  that  the  protest  shall  be 
in  writing.  In  the  present  case,  the  court  merely  finds  that  the  pay- 
ment of  the  tax  and  penalty  was  made  under  protest,  which  may  have 
been  either  written  or  verbal.  We  think  that  this  finding  is  sufficient 
to  show  that  the  payment  was  not  voluntary.  It  is  apparent  from 
the  findings,  it  is  true,  that  the  objection  of  the  parties  was  particu- 
larly made  against  the  legality  of  the  tax,  and  not  against  the  penalty 
as  distinct  therefrom.  But,  of  course,  the  objection  included  the 
penalty  as  well  as  the  tax;  and  as  the  latter  was  clearly  illegal,  we 
think  that  the  plaintiff  should  have  had  judgment  for  the  amount 
thereof,  unless  barred  by  the  Statute  of  Limitations. 

We  think  that  the  defence  of  the  Statute  of  Limitations  cannot  be 
maintained.  Under  the  nineteenth  section  of  the  act  of  July  13,  1866 
(14  Stat.  152),  no  suit  could  be  maintained  for  the  recovery  of  a  tax 
illegally  collected  until  appeal  should  have  been  duly  made  to  the 
Commissioner  of  Internal  Revenue,  and  his  decision  had  thereon. 
The  act  contained  other  provisions  not  material  to  this  case.  In  July, 
1867,  when  the  tax  was  paid,  there  was  no  statutory  limitation  of 
time  for  presenting  claims  for  remission  of  taxes  to  the  Commissioner 
of  Internal  Revenue. 

On  the  6th  of  June,  1872,  an  act  was  passed,  by  the  forty-fourth 
section  of  which  it  was  provided  that  all  suits  for  the  recovery  of  any 
internal  tax  alleged  to  have  been  erroneously  assessed  or  collected, 
or  any  penalty  claimed  to  have  been  collected  without  authority, 
should  be  brought  within  two  years  next  after  the  cause  of  action 
accrued,  and  not  after;  and  all  claims  for  refunding  any  internal  tax 


618  REMEDIES  FOR  WRONGFUL  ACTION. 

or  penalty  should  be  presented  to  the  commissioner  within  two  years 
next  after  the  cause  of  action  accrued,  and  not  after:  Provided,  that 
actions  for  claims  which  had  accrued  prior  to  the  passage  of  the  act 
should  be  commenced  in  the  courts  or  presented  to  the  commissioner 
within  one  year  from  the  date  of  such  passage:  And  provided  further, 
that  where  a  claim  should  be  pending  before  the  commissioner,  the 
claimant  might  bring  his  action  within  one  year  after  such  decision, 
and  not  after.  17  Stat.  257.  When  this  act  was  passed,  the  claim 
in  the  present  case  had  not  been  formally  presented  to  the  commis- 
sioner, and  so  did  not  come  within  the  last  proviso;  but,  for  the  pur- 
pose of  presentation  to  the  commissioner,  it  was  embraced  in  the  first 
proviso.  The  parties,  therefore,  had  by  the  act  one  year  to  present 
their  claim  to  the  commissioner;  and  it  was  thus  presented  on  the 
third  day  of  January,  1873,  within  the  time  allowed  for  that  purpose. 

The  commissioner  rendered  his  decision  on  the  third  day  of  July, 
1873,  and  then,  for  the  first  time,  the  parties  had  a  right  to  bring  suit 
against  the  collector.  Then  their  cause  of  action  first  accrued  against 
him.  It  is  manifest,  therefore,  that  the  cause  of  action  against  the 
collector  was  not  embraced  within  either  the  first  or  the  second  proviso 
of  the  section  just  cited;  and  that  it  stood  upon  the  primary  enact- 
ment of  that  section  requiring  that  suit  should  be  brought  within  two 
years  next  after  the  cause  of  action  accrued.  This  would  give  the 
plaintiff  until  the  3d  of  July,  1875,  to  bring  his  action. 

Thus  the  matter  stood  when  the  Revised  Statutes  went  into  effect 
on  the  22nd  of  June,  1874,  and  there  is  nothing  in  them  to  change 
the  plaintiff's  right.  The  forty-fourth  section  of  the  act  of  1872  is 
substantially  re-enacted  in  sect.  3227  of  the  Revised  Statutes,  which 
contains  no  modifications  of  phraseology  that  affect  the  present  case. 
And  as  it  appears  from  the  findings  of  the  court  that  this  suit  was 
commenced  by  delivery  of  the  summons  to  the  sheriff  on  the  15th  of 
June.  1875,  it  is  apparent  that  the  defence  of  the  Statute  of  Limita- 
tions cannot  be  maintained. 

The  judgment  of  the  Circuit  Court  will  be  reversed,  and  the  case 
remanded  with  instructions  to  enter  judgment  in  favor  of  the  plain- 
tiff for  the  amount  of  the  penalties  exacted  from  the  plaintiff  and 
Henrietta  H.  Wright,  with  interest  and  costs;  and  it  is 

So  ordered. 


DOOLEY  V.  UNITED  STATES. 


DOOLEY  V.  UNITED  STATES. 

Supreme  Court  of  the  United  States.    October,  1900. 
182  United  States  222. 

This  was  an  action  begun  in  the  Circuit  Court,  as  a  Court  of 
Claims,  by  the  firm  of  Dooley,  Smith  &  Co.,  engaged  in  trade  and 
commerce  between  Porto  Rico  and  New  Y'ork,  to  recover  back  certain 
duties  to  the  amount  of  $5374.68,  exacted  and  paid  under  protest  at 
the  port  of  San  Juan,  Porto  Rico,  upon  several  consignments  of  mer- 
chandise imported  into  Porto  Rico  from  New  York  between  July  26, 
1898,  and  May  1,  1900. 

A  demurrer  was  interposed  upon  the  ground  of  want  of  jurisdiction, 
and  the  insufficiency  of  the  complaint.  The  Circuit  Court  sustained 
the  demurrer  upon  the  second  ground,  and  dismissed  the  petition. 
Hence  this  writ  of  error. 

Mr.  Justice  BROWN, delivered  the  opinion  of  the 

court. 

1.  The  jurisdiction  of  the  court  in  this  case  is  attacked  by  the 
government  upon  the  ground  that  the  Circuit  Court,  as  a  Court  of 
Claims,  cannot  take  cognizance  of  actions  for  the  recovery  of  duties 
illegally  exacted. 

By  an  act  passed  March  3,  1887,  to  provide  for  the  bringing  of  suits 
against  the  government,  known  as  the  Tucker  act,  24  Stat.  505,  c.  359, 
the  Court  of  Claims  was  vested  with  jurisdiction  over  "first,  all 
claims  founded  upon  the  Constitution  of  the  United  States  or  any  law 
of  Congress,  except  for  pensions,  or  upon  any  regulation  of  an  Execu- 
tive Department,  or  upon  any  contract,  express  or  implied,  with  the 
government  of  the  United  States,  or  for  damages,  liquidated  or  un- 
liquidated, in  cases  not  sounding  in  tort,  in  respect  of  which  claims 
the  party  would  be  entitled  to  redress  against  the  United  States  either 
in  a  court  of  law,  equity,  or  admiralty,  if  the  United  States  were 
suable;"  and  by  section  2  the  District  and  Circuit  Courts  were  given 
concurrent  jurisdiction  to  a  certain  amount. 

The  first  section  evidently  contemplates  four  distinct  classes  of 
cases;  (1)  those  founded  upon  the  Constitution  or  any  law  of  Con- 
gress, with  an  exception  of  pension  cases;  (2)  cases  founded  upon  a 
regulation  of  an  Executive  Department;  (3)  cases  of  contract,  express 
or  implied,  with  the  government;  (4)  actions  for  damages,  liquidated 
or  unliquidated,  in  cases  not  sounding  in  tort.  The  words  "not  sound- 
ing in  tort"  are  in  terms  referable  only  to  the  fourth  class  of  cases. 


620  REMEDIES  FOR  WRONGFUL  ACTION. 

The  exception  to  the  jurisdiction  is  based  upon  two  grounds :  First, 
that  the  court  has  no  jurisdiction  of  cases  arising  under  the  revenue 
laws;  and,  second,  that  it  has  no  jurisdiction  in  actions  for  tort. 

In  support  of  the  first  proposition  we  are  cited  to  the  case  of 
Nichols  v.  United  States,  7  Wall.  122,  in  which  it  was  broadly  stated 
that  "cases  arising  under  the  revenue  laws  are  not  within  the  jurisdic- 
tion of  the  Court  of  Claims."  The  action  in  that  case  was  brought  to 
recover  an  excess  of  duties  paid  upon  certain  liquors  which  had  leaked 
out  during  the  voyage,  and,  being  thus  lost,  were  never  imported  in 
fact  into  the  United  States.  Plaintiffs  paid  the  duties,  as  exacted, 
but  made  no  protest,  and  subsequently  brought  suit  in  the  Court  of 
Claims  for  the  overpayment.  The  act  in  force  at  that  time  gave  the 
Court  of  Claims  power  to  hear  and  determine  "all  claims  founded 
upon  any  law  of  Congress,  or  upon  any  regulation  of  an  Executive 
Department,  or  upon  any  contract,  express  or  implied,  with  the  gov- 
ernment of  the  United  States."  The  court  held,  first,  that  the  duties 
could  not  be  recovered  because  they  were  not  paid  under  protest,  and, 
second,  that  Congress  did  not  intend  to  confer  upon  the  Court  of 
Claims  jurisdiction  of  cases  arising  under  the  revenue  laws,  inasmuch 
as,  by  the  act  of  February  26,  1845,  5  Stat.  727,  c.  22,  Congress  had 
given  a  right  of  action  against  the  collector  in  favor  of  persons  "who 
have  paid,  or  shall  hereafter  pay,  money,  as  and  for  duties,  under 

protest in  order  to  obtain  goods,  wares,  or  merchandise 

imported  by  him  or  them,  or  on  his  or  their  account,  which  duties  are 
not  authorized  or  payable  in  part  or  in  whole  by  law,"  provided  that 
protests  were  duly  made  in  writing.  It  was  held  that  this  remedy  was 
exclusive,  and  that  Congress,  after  having  carefully  constructed  a 
revenue  system,  with  ample  provisions  to  redress  wrong,  did  not  in- 
tend to  give  to  the  taxpayer  and  importer  a  different  and  further 
remedy. 

Subsequent  statutes,  however,  have  so  far  modified  that  special 
remedy  that  it  can  no  longer  be  made  available,  and  the  broad  state- 
ment in  the  Nichols  case,  that  revenue  cases  are  not  within  the  cog- 
nizance of  the  Court  of  Claims,  if  still  true,  must  be  accepted  with 
material  qualifications.  By  the  Customs  Administrative  act  of  1890, 
as  we  have  just  held  in  DeLima  v.  Bid-well,  an  appeal  is  given  from 
the  decision  of  the  collector  "as  to  the  rate  and  amount  of  the  duties 
chargeable  upon  imported  merchandise,"  to  a  board  of  general  ap- 
praisers, whose  decision  shall  be  final  and  conclusive  "as  to  the  con- 
struction of  the  law  and  the  facts  respecting  the  classification  of  such 
merchandise  and  the  rate  of  duties  imposed  thereon  under  such  classi- 
fication," unless  application  be  made  for  a  review  to  the  Circuit  Court 


DOOLEY  V.  UNITED  STATES.  621 

of  the  United  States.  This  remedy  is  doubtless  exclusive  as  applied 
to  customs  cases ;  but,  as  we  then  held,  it  has  no  application  to  actions 
against  the  collector  for  duties  exacted  upon  goods  which  were  not 
imported  at  all.  Such  cases,  although  arising  under  the  revenue  laws, 
are  not  within  the  purview  of  the  Customs  Administrative  Act ;  as  for 
such  cases  there  is  still  a  common  law  right  of  action  against  the 
collector,  and  we  think  also  by  application  to  the  Court  of  Claims. 
There  would  seem  to  be  no  doubt  about  the  plaintiffs'  remedy  against 
the  collector  at  San  Juan. 

In  the  Nichols  case,  it  was  held  that,  as  there  was  a  remedy  by 
action  against  the  collector,  expressly  provided  by  statute,  that  remedy 
was  exclusive.  In  DeLima  v.  Bid-well  we  held  that  although  no  other 
remedy  was  given  expressly  by  statute  than  that  provided  by  the  Cus- 
toms Administrative  Act,  there  was  still  a  common  law  remedy 
against  the  collector  for  duties  exacted  upon  goods  not  imported  at 
all;  but  it  does  not  therefore  follow  that  this  remedy  is  exclusive,  and 
that  the  importer  may  not  avail  himself  of  his  right  of  action  in  the 
Court  of  Claims. 

But  conceding  that  the  Nichols  case  does  not  stand  in  the  way  of  a 
suit  in  the  Court  of  Claims,  the  government  takes  the  position  that  a 
suit  in  the  United  States  to  recover  back  duties  illegally  exacted  by  a 
collector  of  customs  is  really  an  action  "sounding  in  tort,"  although 
not  an  action  "for  damages,  liquidated  or  unliquidated"  within  the 
fourth  class  of  cases  enumerated  in  the  Tucker  act. 

In  the  cases  under  consideration  the  argument  is  made  that  the 
money  was  tortiously  exacted ;  that  the  alternative  of  payment  to  the 
collector  was  a  seizure  and  sale  of  the  merchandise  for  the  non-pay- 
ment of  duties;  and  that  it  mattered  not  that  at  common  law  an 
action  for  money  had  and  received  would  have  lain  against  the  col- 
lector to  recover  them  back.  But  whether  the  exactions  of  these  duties 
were  tortious  or  not ;  whether  it  was  within  the  power  of  the  importer 
to  waive  the  tort  and  bring  suit  in  the  Court  of  Claims  for  money  had 
and  received,  as  upon  an  implied -contract  of  the  United  States  to  re- 
fund the  money  in  case  it  was  illegally  exacted,  we  think  the  case  is 
one  within  the  first  class  of  cases  specified  in  the  Tucker  act  of  claims 
founded  upon  a  law  of  Congress,  namely,  a  revenue  law,  in  respect  to 
which  class  of  cases  the  jurisdiction  of  the  Court  of  Claims,  under  the 
Tucker  act,  has  been  repeatedly  sustained. 

Thus,  in  United  States  v.  Kaufman,  96  U.  S.  567,  a  brewer  who  had 
been  illegally  assessed  for  a  special  tax  upon  his  business,  was  held 
entitled  to  bring  suit  in  the  Court  of  Claims  to  recover  back  the 


622  REMEDIES  FOR  WRONGFUL  ACTION. 

amount,  upon  the  ground  that  no  special  remedy  had  been  provided 
for  the  enforcement  of  the  payment,  and  consequently  the  general 
laws  which  govern  the  Court  of  Claims  may  be  resorted  to  for  relief, 
if  any  can  be  found  applicable  to  such  a  case.  This  is  upon  the  prin- 
ciple that  a  liability  created  by  statute  without  a  remedy  may  be  en- 
forced by  a  common  law  action.  The  Nichols  case  was  distinguished 
upon  the  ground  that  the  statute  there  had  provided  a  special  remedy. 

So,  too,  in  United  States  v.  Savings  Bank,  104  U.  S.  728,  the  Court 
of  Claims  was  held  to  have  jurisdiction  of  a  suit  to  recover  back  cer- 
tain taxes  and  penalties  assessed  upon  a  savings  bank. 

In  Campbell  v.  United  States,  107  II.  S.  407,  it  was  held  that  a 
party  claiming  to  be  entitled  to  a  drawback  of  duties  upon  manufac- 
tured articles  exported  might,  when  payment  thereof  has  been  refused, 
maintain  a  suit  in  the  Court  of  Claims,  because  the  facts  raised  an 
implied  contract  that  the  United  States  would  refund  to  the  importer 
the  amount  he  had  paid  to  the  government.  There  was  here  no  ques- 
tion of  tort. 

Cases  in  this  collection  illustrative  of  the  law  relative  to  the  refunding 
of  taxes  are:  Collector  v.  Beggs,  17  Wallace  (U.S.)  i82 ;  Dyer  v.  Osborne, 
11  R.  I.  321 ;  Knowlton  v.  Moore,  178  U.  S.  41 ;  Ould  v.  Richmond,  23  Grat- 
tan  (Va.)  464;  State  Tonnage  Tax  Cases,  12  Wallace  204;  Torrey  v.  In- 
habitants, 21  Pickering  (Mass.)  64;  Tyler  v.  Inhabitants,  6  Metcalf  (Mass.) 
470;  Veazie  Bank  v.  Fenno,  8  Wallace  (U.  S.)  533. 


II.     REMEDIES  AGAINST  ASSESSMENTS. 

1.  Certiorari. 
PEOPLE  V.  TRUSTEES  OF  OGDENSBURGH. 

Court  of  Appeals  of  New  York.    January,  1812. 
48  New  York,  391. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court  in  the  fourth  judicial  district,  quashing  a  common  law  writ 
of  certiorari,  which  was  allowed  at  a  Special  Term  of  the  Supreme 
Court,  to  rescind  an  assessment  against  the  relators,  as  agents  of 
George  Parish,  a  resident  of  Bohemia,  made  in  1866.  The  return  of 
the  defendants  to  the  writ  shows  that  their  predecessors  in  office 
made  the  assessment  complained  of,  and  it  contains  all  the  pro- 
ceedings had  before  the  board  of  trustees,  and  their  action  thereon. 


PEOPLE  V.  TRUSTEES  OF  OGDENSBURGH.    623 

The   leading   features   of  the  return  and  other  facts  appear  suffi- 
ciently in  the  opinion. 

EARL,  C.  The  charter  of  the  village  of  Ogdensburgh,  as  amended 
by  chapter  62  of  the  Laws  of  1865,  provides  that  on  or  before  the 
first  day  of  May,  in  each  year,  it  shall  be  the  duty  of  the  trustees 
to  prepare  an  assessment  roll  of  the  property  in  the  said  village 
subject  to  taxation,  with  the  valuation  thereof  as  set  down  in  the 
last  preceding  assessment  roll,  or  as  the  same  may  be  changed  under 
the  authority  given  in  the  charter;  and  to  add  to  such  assessment 
roll  any  property  liable  to  taxation  with  the  taxable  value  thereof, 
which  may  have  come  within  the  corporation  since  the  making  of 
the  town  assessment  roll,  or  which  may  have  been  omitted  thereon, 
and,  in  their  discretion,  to  reassess  any  property  which,  since  the 
making  of  the  town  assessment  roll,  has  changed  its  value.  The 
trustees  are  clothed  with  the  same  power  to  administer  oaths  and 
correct  valuations  as  is  given  by  law  to  town  assessors,  and  they 
may  employ  a  special  clerk  to  do  the  clerical  duty  and  ascertain 
unassessed  property  under  their  direction;  and  upon  the  completion 
of  the  roll,  they  are  required  to  cause  notice  to  be  published  of 
a  time  and  place  to  hear  objections.  At  the  time  and  place  speci- 
fied, they  are  required  to  meet  and  hear  objections  and  correct  the 
roll  as  the  facts  may  require,  and  the  roll,  when  so  corrected,  is 
declared  to  be  final  and  conclusive. 

The  facts  contained  in  the  return  to  the  writ  cannot  be  dis- 
puted, and  must  be  taken  as  true. 

It  has  been  finally  settled  that  a  common-law  certiorari  to  review 
the  proceedings  of  assessors,  brings  up  the  merits  as  well  as  ques- 
tions of  jurisdiction  and  regularity,  and  that  where  assessors  have 
neither  exceeded  their  powers,  nor  been  irregular  in  exercising  them, 
the  court  will  still,  upon  the  facts  appearing  in  the  return,  examine 
and  correct  their  decisions  if  erroneous.  People  v.  The  Assessors 
of  Albany,  40  N.  Y.  154.  I  will,  therefore,  proceed  to  examine 
this  case  upon  the  merits. 

The  return  shows  that  the  relators  were,  at  the  time  the  assess- 
ment was  made,  the  sole  general  agents  of  George  Parish,  a  resident 
of  Bohemia,  and  that  as  such  agents  they  had  possession  and  control 
of  "all  his  real  and  personal  property  and  estate,  debts,  dues, 
choses,  claims  and  demands,"  in  said  village  and  within  the  county 
of  St.  Lawrence;  that  the  trustees  assessed  them  as  such  agents 
for  $50,000  of  personal  property,  and  that  after  hearing  their  ob- 
jections at  the  time  and  place  appointed  for  that  purpose  they 
reduced  this  sum  to  $30,000.  The  relators  claimed  that  the 


624  KEMEDIES  FOR  WRONGFUL  ACTION. 

whole  amount  should  be  stricken  off  from  the  assessment  roll,  and 
the  first  inquiry  is,  whether  they  had  $30,000  of  taxable  property 
in  their  possession  or  under  their  control.  The  law  makes  it  the 
duty  of  the  trustees  or  assessors,  when  the  property  is  not  upon  the 
town  assessment  roll,  to  place  a  value  upon  it  for  the  purpose  of 
taxation.  They  are  to  search  out  the  property,  and  place  a  value 
upon  it,  and  then  place  it  upon  the  assessment  roll.  When  they 
have  done  this,  the  roll  furnishes  prima  facie  evidence  that  the 
property  is  taxable,  and  its  value.  After  the  completion  of  the 
roll,  they  are  required  to  give  notice  of  a  time  and  place  to 
hear  objections,  and  at  such  time  and  place  they  are  required  to 
hear  proofs  and  objections,  and  to  make  corrections  as  town  assessors 
are  required  to. 

By  section  6  of  chapter  176  of  Laws  of  1851,  as  amended  by 
chapter  536  of  Laws  of  1857,  it  is  provided  that  "whenever  any 
person  on  his  own  behalf,  or  on  behalf  of  those  whom  he  may  rep- 
resent, shall  apply  to  the  assessors  of  any  town  or  ward  to  reduce 
the  value  of  his  real  and  personal  estate,  as  set  down  in  the 
assessment  roll,  it  shall  be  the  duty  of  such  assessors  to  examine 
such  person  under  oath,  touching  the  value  of  his  or  their  said 
real  or  personal  estate,  and  after  such  examination  and  such  sup- 
plementary evidence,  under  oath,  as  shall  be  presented  by  the 
party  aggrieved,  they  shall  fix  the  value  thereof  at  such  sum  as  they 
shall  deem  just;  but  if  such  person  shall  refuse  to  answer  any  ques- 
tion as  to  the  value  of  his  real  or  personal  estate,  or  the  amount 
thereof,  or  present  supplementary  evidence  under  oath  to  justify 
a  reduction,  the  said  assessors  shall  not  reduce  the  value  of  such 
real  or  personal  estate."  By  this  statute  the  assessors  are  not 
bound  by  the  oath  taken  before  them.  They  are  required  to  hear 
the  proofs  and  then  to  fix  the  value  "at  such  sum  as  they  may  deem 
just/'  Where  the  property  is  visible,  the  assessors  are  supposed  to 
have  viewed  it.  If  an  oath  should  be  made  before  them  that  cer- 
tain land  assessed  is  worth  but  $50  per  acre,  they  may  still,  if 
they  think  it  worth  so  much,  assess  it  at  $100  per  acre;  or  if 
an  oath  should  be  made  that  personal  property  is  worth  only  $1,000, 
they  may  still  assess  it  at  $3,000.  The  statute  makes  them  the 
judges  of  the  value  of  the  property  for  the  purposes  of  taxation. 
They  are  required  to  exercise  their  judgment  as  to  its  value,  not- 
withstanding any  proof  that  may  be  produced  before  them,  and  the 
case  would  have  to  be  a  very  extraordinary  one  which  would  auth- 
orize the  Supreme  Court  upon  certiorari  to  review  their  judgment. 
Indeed,  it  would  be  quite  impracticable  in  most  cases  for  the 


PEOPLE  V.  TRUSTEES  OF  OGDENSBURGH.    625 

Supreme  Court  upon  certiorari  to  correct  the  judgment  of  the 
assessor?  as  to  values,  and  my  attention  has  been  called  to  no 
case  where  it  has  been  done. 

If,  however,  the  assessors  place  upon  the  assessment  roll  property 
not  liable  to  taxation;  and  they  refuse,  upon  the  application  of 
the  person  aggrieved,  to  strike  it  off,  then  their  action  can  be 
reviewed  by  certiorari;  as  if  they  assess  personal  property  which 
has  its  situs  in  another  state  (Hoyt  v.  The  Commissioners  of 
Taxes,  23  N.  Y.,  224;  People  v.  Gardner,  51  Barb.,  352),  or  which 
is  exempt  from  taxation  by  the  laws  of  the  State  or  of  the  United 
States. 

The  facts  returned  show  that  the  relators  had  in  their  possession,  , 
as  such  agents,  a  large  amount  of  household  furniture  and  effects 
in  the  mansion  of  their  principal  in  the  village,  consisting  of 
silver  and  plated  ware,  mirrors,  books,  pictures,  wines,  cigars  and 
other  articles.  A  list  of  these  articles  seems  to  have  been  furnished 
by  one  of  the  relators,  with  the  value  of  each  article  set  down, 
and  the  value  of  the  whole,  as  estimated  by  him,  is  $5,896.  There 
is  no  evidence  what  value  the  trustees  put  upon  this  property. 
They  were  also  acting  under  oath,  and  they  may  have  valued  it  at 
a  much  larger  sum.  Suppose  they  valued  it  at  $10,000  or  $15,000; 
how  could  the  Supreme  Court  or  this  court  determine  that  the  one 
or  the  other  party  was  in  error  as  to  the  valuation  —  all  the  parties 
really  giving  their  estimate  under  oath?  We  are  unable  to  say, 
therefore,  how  much  of  the  $30,000  was  made  up  or  ought  to  have 
been  made  up  of  this  furniture.  It  also  appears  that  on  the 
first  day  of  May  the  relators,  as  such  agents,  had  $6,000  in  money 
in  banks.  It  matters  not  that  it  was  subsequently  used.  It  was 
there  when  the  assessment  was  made,  and  was  thus  liable  to  be 
assessed.  It  may,  therefore,  be  assumed  that  this  $6,000  was  part 
of  the  $30,000.  It  also  appeared  that  the  relators,  as  such  agents, 
had  in  their  possession  contracts  for  the  sale  of  land  amounting 
to  more  than  $50,000,  less  (it  is  not  stated  how  much  less)  than 
$20,000  of  which  was  for  land  sold  in  the  town  in  which  the  vil- 
lage of  Ogdensburgh  was  situated,  and  hence  we  may  assume  that 
nearly  $20,000,  on  account  of  these  contracts  entered  into  the  said 
sum  of  $30,000.  It  does  not  appear,  therefore,  that  the  trustees 
erred  m  the  amount  at  which  they  assessed  the  relators;  and  the 
only  other  question  to  be  considered  is,  whether  this  amount  was 
properly  assessed  to  them  as  the  agents  of  Parish. 

That  the  furniture  in  the  mansion  and  the  money  in  the  bank 
40 


,  ,* 
^  ' 


626  REMEDIES  FOR  WRONGFUL  ACTION. 

were,  under  these  provisions,  properly  assessable  to  the  relators  is 
not  seriously  disputed.  And  I  am  unable  to  see  why  the  money 
due  upon  the  land  contracts  must  not  be  assessed  in  the  same  way. 

I  have,  therefore,  upon  the  merits  of  this  case,  reached  a  con- 
clusion adverse  to  the  relators,  without  examining  or  passing  upon 
various  technical  objections  raised  and  discussed  by  the  counsel 
for  the  respondents. 

The  judgment  should  be  affirmed  with  costs. 

All  concur. 

Judgment  affirmed. 


PEOPLE  EX  REL.  WARREN  V.  CARTER, 

Court  of  Appeals  of  New  York.    June,  1888. 
109  New   York,  576. 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court 
in  the  third  judicial  department,  made  November  15,  1887,  which 
affirmed  an  order  of  the  special  term  reducing  assessments  on  the 
real  property  of  the  relators,  made  in  certiorari  proceedings  under 
chapter  269  of  the  Laws  of  1880.  (Reported  below,  46  Hun,  444.) 

The  relators  were  assessed  for  the  year  1886,  in  the  city  of 
Troy,  upon  three  parcels  of  land,  one  parcel  known  as  "River 
View,"  containing  thirty  acres,  which  was  assessed  at  $60,500; 
lot  194,  on  the  west  side  of  Third  street,  on  which  were  two  houses 
numbered  47  and  49,  assessed  at  $29,000,  and  a  third  parcel,  con^ 
taining  ten  acres,  which  was  assessed  at  $12,000,  but  which  latter 
assessment  is  not  now  in  controversy.  The  relators,  within  fifteen 
days  after  the  completion  of  the  assessment-roll  and  its  delivery 
to  the  comptroller,  procured  a  writ  of  certiorari  to  be  issued  under 
the  act  of  1880,  directed  to  the  assessors  of  the  city  and  to  the 
comptroller,  upon  a  petition,  alleging,  in  substance,  that  the  said 
several  assessments  were  erroneous  by  reason  of  over-valuation  and 
inequality. 

In  support  of  the  allegation  of  inequality  the  petition  sets  forth 
that  the  lands  of  the  relator  were  no  more  valuable  than  lands 
in  close  proximity  thereto,  while  the  assessment  thereof  was  largely 
in  excess  of  the  assessment  of  such  other  lands.  The  allegations 
of  over-valuation  or  inequality  set  forth  in  the  petition,  and  incor- 


PEOPLE  EX  EEL.  WARREN  V.  CARTER.     627 

portated  in  the  writ  issued  thereunder,  were  fully  denied  in  the 
return  made  to  the  writ,  and  the  court,  on  the  matter  coming  before 
it,  appointed  a  referee  to  take  the  proofs,  and  on  the  coming  in  of 
his  report  the  court  decided  that  the  assessment  of  the  "River  View" 
property  was  erroneous  for  over  valuation  in  the  sum  of  $20,500, 
and  reduced  the  amount  from  $60,500  to  $40,000.  The  court  also 
decided  that  the  assessment  of  "lot  194  and  houses  47  and  49, 
west  side  Third  street/'  assessed  at  $29,000,  was  unequal  "in  that 
it  had  been  made  at  a  higher  proportionate  valuation  than  other 
real  property  on  the  same  roll  in  immediate  proximity  thereto," 
and  that  the  assessment  on  lot  194  should  be  reduced  $3,900  to 
make  it  proportionately  equal  to  the  assessment  on  the  lots  immedi- 
ately adjoining. 

There  was  proof  to  sustain  the  finding  of  over-valuation  in 
respect  to  the  "River  View"  property.  The  only  evidence  to  sus- 
tain the  finding  of  inequality  in  the  assessment  of  lot  194  was  that 
the  assessment  of  lot  193,  adjoining,  was  relatively  lower  than 
the  assessment  on  lot  194,  and  the  court  found  that  the  inequality 
amounted  to  the  sum  of  $3,900. 

ANDREWS,  J.  All  real  and  personal  estate  in  this  state  not 
especially  exempted  is,  by  law,  liable  to  taxation  upon  an  assess- 
ment at  its  full  value.  The  tax  laws  proceed  upon  the  theory  that 
all  property  protected  by  law  should  bear  its  equal  burden  of  taxa- 
tion, and  the  statutory  system,  if  exactly  administered  according 
to  the  letter  of  the  statutes,  would  result  in  perfect  equality  of 
benefit  and  burden  and  none  would  have  any  just  ground  of 
complaint.  But  no  system  of  taxation  has  as  yet  been  devised 
which  is  capable  of  complete  and  perfect  administration.  The 
ascertainment  and  valuation  of  property  liable  to  taxation  is,  under 
our  system,  committed  to  a  board  of  assessors.  In  discharging  their 
functions,  mistakes  or  errors  are  liable  to  be  committed,  which  pre- 
vent a  perfect  execution  of  the  system  of  assessment.  It  is  known 
that  a  large  amount  of  personal  property  escapes  taxation  either 
from  the  negligence  of  assessors  or  because  its  existence  cannot 
be  ascertained.  So,  also,  property  may  be  listed  which  is  not  liable 
to  assessment,  or  the  assessors,  from  mistake,  inadvertence  or  mis- 
judgment,  may  place  an  erroneous  valuation  on  property,  either 
more  or  less  than  its  actual  value,  thereby  producing  inequality 
of  taxation.  The  act  of  1880  deals  with  the  subject  of  assess- 
ments in  respect  to  illegality,  over-valuation,  and  inequality  of 
valuation,  and  authorizes  a  review  on  certiorari  at  the  instance  of 
any  person  or  corporation  assessed  who  claims  to  have  been  ag- 


628  KEMEDIES  FOR  WKONGFTJL  ACTION. 

grieved  by  an  assessment  in  either  of  the  respects  mentioned.  The 
remedy  afforded  by  the  act,  where  the  assessment  is  illegal  or  where 
there  is  an  over-valuation,  is  simple,  practicable  and  complete.  The 
question  whether  the  assessment  complained  of  is  illegal  presents 
purely  a  question  of  law  on  facts  appearing  on  the  assessment  roll, 
or  which  may  be  readily  ascertained  by  evidence.  The  question 
of  over-valuation  is,  in  its  nature,  simple  and  free  from  perplex- 
ity, and  is  solved,  as  is  every  other  fact  submitted  to  the  court  for 
determination  in  case  of  conflict,  by  the  weight  and  preponderance 
of  evidence.  The  clause  in  the  act  of  1880,  which  gives  a  remedy 
where  the  valuation  "is  unequal,  in  that  the  assessment  has  been 
made  at  a  higher  proportionate  valuation  than  other  real  and  per- 
sonal property  on  the  same  roll  by  the  same  officers,"  presents  a 
question  of  much  greater  difficulty.  It  is  claimed  on  the  part  of  the 
relators,  that,  by  the  true  construction  of  this  clause,  it  is  sufficient, 
to  entitle  a  property  owner  to  a  reduction  of  his  assessment,  that 
some  other  property  of  the  same  description,  real  or  personal,  is 
valued  on  the  same  roll  at  a  less  proportionate  value  than  his  own. 
This  being  established,  it  is  claimed  that  the  party  claiming  the 
benefit  of  the  statute  is  entitled  to  a  reduction  of  the  valuation  of 
his  property  to  correspond  with  the  valuation  affixed  by  the  assess- 
ors on  the  property  having  such  lower  proportionate  valuation.  We 
concur  with  Judge  PABKER  in  his  dissenting  opinion  below  upon 
this  point.  The  obvious  result  of  the  construction  claimed  by  the 
relators,  if  adopted,  would  be,  as  is  pointed  out  by  Judge  PARKER, 
that  every  property  owner  whose  property  is  assessed,  could  demand 
that  the  assessment  of  his  property  should  be  reduced  to  a  valuation 
proportionate  to  the  lowest  valuation  of  any  similar  property  on 
the  assessment  roll,  situate  anywhere  in  the  town  or  assessment  dis- 
trict, although  his  own  property  was  not  assessed  beyond  its  actual 
value,  and  although  it  was  not  made  to  appear  that,  by  reason  of  the 
under-valuation  of  the  particular  property  with  which  it  was  com- 
pared, the  claimant  would  be  compelled  to  pay  more  than  his 
due  share  of  the  aggregate  tax.  In  the  nature  of  things,  it  is  im- 
possible that  all  valuations  should  represent  the  precise  actual 
value  of  the  property  valued.  If  a  particular  piece  of  property 
on  an  assessment-roll  is  under-valued,  another  may  be  correspond- 
ingly over-valued.  Where  there  is  no  over-valuation  of  his  own 
property,  it  does  not  follow  that  the  taxpayer  will  be  injured  by 
an  under-valuation  of  some  piece  of  property  belonging  to  another. 
If  all  the  valuations  fin  the  assessment  roll,  other  than  that  of  the 
party  complaining,  were  proportionately  equal,  and  also  proportion- 


PEOPLE  EX  REL.  WARREN  V.  CARTER.     629 

ately  lower  than  the  valuation  of  his  property,  injury  to  the  claim- 
ant might,  perhaps,  be  a  just  inference.  The  mere  fact  that  the 
claimant  can  show  that  his  land  is  assessed  proportionately  higher 
than  a  certain  other  piece  on  the  same  roll  does  not  alone  show  that 
he  is  aggrieved,  or  that  he  will  be  compelled  to  pay  more  than  his 
just  share  of  the  aggregate  tax.  By  the  terms  of  the  act  of  1880, 
it  must  be  made  to  appear  that  the  party  seeking  the  remedy 
afforded  thereby  "is,  or  will  be,  injured  by  the  alleged  illegal,  erron- 
eous or  unequal  assessment"  of  which  he  complains.  The  adoption 
of  the  construction  of  the  act  of  1880,  contended  for  by  the  relator, 
would  greatly  embarrass  the  collection  of  taxes  and  lead  to  burden- 
some litigation,  while  at  the  same  time  it  would  award  relief 
in  many  and  probably  in  most  cases  where  no  real  right  was  in- 
fringed, nor  an  actual  injury  suffered.  Those  property  owners 
who  were  alert  and  prompt  to  avail  themselves  of  the  act,  would 
succeed  in  shifting  a  part  of  the  burden  of  taxation  from  their 
own  shoulders  and  casting  it  upon  those  less  vigilant  and  active. 
Where  the  assessors  in  a  particular  case  depart  from  a  general 
rule  or  ratio  of  assessment  which  they  have  adopted,  to  the  injury 
of  the  taxpayer  in  the  particular  case,  the  statute  affords  a  remedy. 
Without  undertaking  to  define  the  precise  scope  of  the  remedy  for 
disproportionate  valuations  of  property,  given  by  the  act  of  1880, 
we  think  it  may  be  safely  said  that  the  petitioner  must  show  a 
state  of  facts  from  which  a  presumption  justly  arises  that  the 
inequality  of  which  he  complains  will  subject  him  to  the  payment 
of  more  than  his  just  proportion  of  the  aggregate  tax,  and  that 
this  presumption  is  not  raised  by  proof  that  in  a  particular  in- 
stance property  is  assessed  at  a  proportionately  lower  valuation 
than  his  own.  Nor  does  it,  we  think,  make  any  difference  that  the 
assessments  compared  were  of  contiguous  property.  The  object  of 
the  statute-  was  to  afford  a  remedy  to  a  party  injured  by  unequal 
valuations,  not  to  enable  him,  on  the  mere  proof  of  a  mistake  or 
misjudgment  of  the  assessors,  as  to  the  relative  valuation  of  hia 
property  and  that  of  another,  to  have  his  assessment  reduced, 
although  his  own  property  was  not  over-valued,  and  it  does  nof 
appear,  taking  into  view  the  aggregate  assessment  and  valuation  of 
the  taxable  property  on  the  roll,  that  he  will  be  compelled  to  pay 
more  than  his  just  share  of  the  tax. 

The  conclusion  of  the  court  below  that  there  was  an  over-valua- 
tion of  the  property  known  as  "River  View,"  is  supported  by 
evidence,  and  is  not  reviewable  in  this  court.  (People  ex  rel.  R.  W. 


G30  REMEDIES  FOR  WRONGFUL  ACTION. 

&  0.  R.  R.  Co.  v.  Hicks,  105  N.  Y.,  198,  200.)  The  order,  so  far 
as  it  relates  to  that  property,  should  be  affirmed. 

That  part  of  the  order  relating  to  the  assessment  on  lot  No. 
194  West  Third  street  should  be  reversed.  The  court  did  not  sus- 
tain the  claim  of  over-valuation  in  respect  to  that  lot,  but  reduced 
the  assessment  on  the  ground  of  disproportionate  valuation  as 
between  lot  194  and  lot  193.  This  ground,  as  we  have  held,  is 
untenable. 

The  order  of  the  General  Term  should  be  affirmed  as  to  "River 
View"  property,  and  the  order  of  the  Special  and  General  Terms  as 
to  the  assessment  on  lot  194  should  be  reversed. 

All  concur. 

Ordered    accordingly. 

Other  cases  in  this  collection  illustrative  of  the  use  of  the  certiorari  in 
tax  matters  are:  People  v.  Barker,  146  N.  Y.  304;  People  v.  Coleman,  126 
N.  Y.  433;  People  v.  Cummissioners,  23  N.  Y.  224;  People  v.  Forrest,  96 
N.  Y.  544;  People  v.  Mayor,  4  N.  Y.  419;  People  v;  Smith,  88  N.  Y.  576; 
People  v.  Sacramento  County,  59  Cal.  321;  People  v.  Wemple,  117  N.  Y. 
136;  State  v.  City  of  Newark,  3  Dutcher  (N.  J.  L.)  186;  State  v.  Platt,  24 
N.  J.  L.  108;  State  v.  Sickles,  4  Zabriskie  (N.  J.  L.)  125;  Whiteford  Town- 
ship v.  Probate  Judge,  53  Mich.  130;  Williamson  v.  New  Jersey,  130  U.  S. 
189. 

II.  STATUTORY  APPEAL. 
THE   MANCHESTER   MILLS   V.    CITY   OF   MANCHESTER. 

Superior   Court   of  Judicature   of   New    Hampshire.      June,   1876. 
57  New  Hampshire,  309. 

Petition,  for  abatement  of  taxes,  representing  that  the  assessors 
of  Manchester,  in  April,  1874,  assessed  a  tax  upon  the  petitioners' 
property  in  said  city,  under  the  name  of  the  Manchester  Prinf" 
Works  and  Mills,  rating  the  land  and  buildings  of  the  corporation 
at  $400,000,  and  the  factories  and  machinery  at  $950,000,  and 
assessing  a  tax  upon  that  valuation. 

The  petitioners  represent  that  according  to  the  valuation  and 
taxation  of  other  property  in  said  city  for  this  and  other  years, 
the  valuation  of  the  land  and  buildings  should  not  have  been 
above  $150,000,  and  of  the  factories  and  machinery,  $500,000;  that 
on  July  25,  1874,  they  made  application  to  said  assessors  for  an 
abatement  of  said  tax,  which  was  refused. 

At  the  September  term  of  this  court  the  petition  was  referred 
to  Aaron  W.  Sawver  and  John  S.  H.  Frink. 


MANCHESTER  MILLS  V.  MAN  CHESTER  631 

At  this  term  the  referees  submitted  their  report. 

The  counsel  for  the  city  thereupon  filed  objections  to  the  report 
and  moved  that  the  same  be  set  aside. 

CUSHING,  C.  J.  The  petitioners  represent  that  at  the  time  of 
the  assessment  complained  of  their  land  and  buildings  were  valued 
at  $400,000,  their  factories  and  machinery  at  $950,000;  and  they 
allege  that  this  valuation,  according  to  the  valuation  of  other 
property  in  this  and  other  years,  was  much  too  large; — and  for 
this  reason  they  claim  an  abatement  of  the  tax.  It  is  worth  while 
to  note  in  the  beginning  what  the  ground  was  on  which  they  claim 
their  abatement  of  taxes.  It  was  not  that  their  property  was 
appraised  too  high  according  to  its  real  value,  or  even  high  enough, 
but  that  it  was  appraised  too  high  according  to  the  valuation  of 
other  property.  The  city  of  Manchester  does  not  appear  to  have 
made  in  the  outset  any  objection  to  the  lawfulness  or  justness  of 
this  claim.  The  record  does  not  show  that  it  was  objected  on  the 
part  of  the  city  that  this  property  ought  to  be  valued  at  its  exact 
market  value,  while  all  the  other  property  in  Manchester  was  valued 
at  a  much  less  rate;  but  at  the  time  when  the  commission  was 
issued  it  was  apparently  conceded  that  if  this  property  was  really 
valued  at  a  much  higher  rate  than  other  property  for  the  purpose 
of  taxation,  it  would  be  just  that  it  should  be  abated. 

Xor  is  it  easy  to  see  how  the  city  could  contend  that  this  claim 
of  the  petitioners  was  not  just,  assuming  that  the  facts  on  which 
it  rested  were  true;  and  I  think  it  would  be  difficult  so  to  contend. 
I  believe  it  is  admitted  to  be  just  and  lawful  that  each  person 
should  bear  the  burden  of  taxation  equally  with  all  others.  In  or- 
der to  produce  this  result,  it  is  necessary  that  all  property  should 
be  valued  proportionally;  and  if  for  any  reason,  whether  to  prevent 
the  city  from  being  rated  too  high  by  the  legislature  in  fixing  the 
share  of  state  and  county  taxes  which  each  town  and  city  is  re- 
quired to  pay,  or  for  any  other  reason,  the  authorities  had  valued 
all  other  property  at  less  than  its  true  value,  the  petitioners'  prop- 
erty for  purpose?  of  taxation  ought  to  be  valued  at  the  same  rate. 

The  law  requires  that  the  circuit  court  shall  make  such  order  on 
this  petition  as  is  just.  I  think  we  ought  to  hold  as  law,  that, 
whenever  it  shall  be  made  to  appear  that  the  property  in  any  town 
or  city  has  been  designedly  appraised  at  less  than  its  true  value, 
the  question  to  be  determined  is,  whether  the  property  on  which 


632  REMEDIES  FOR  WRONGFUL  ACTION. 

the  petitioners  claim  an  abatement  of  tax  has  been  over-valued  ac- 
cording to  that  rate. 

If  it  were  true,  that,  because  the  law  requires  that  all  property 
should  be  appraised  for  the  purposes  of  taxation  at  its  fair  cash 
value,  the  court  is  bound  to  presume  that  this  has  been  done,  and 
is  therefore  estopped  from  inquiring  into  anything  but  the  actual 
value  of  the  property  in  question,  then  the  petition  ought  to  have 
been  dismissed  instead  of  being  sent  to  a  commission,  because  it 
requires  of  the  court  what  the  court,  according  to  that  view  of  the 
law,  cannot  lawfully  grant. 

The  petition,  however,  was  neither  dismissed  nor  amended ;  and 
we  are  therefore  to  understand  that  when  the  commission  issued  it 
was  then  understood  by  all  the  parties  that  if  the  allegations  in  the 
petitions  were  true  it  would  be  just  that  the  tax  should  be  abated. 

The  committee  having  reported,  the  defendants  move  to  set  aside 
the  report,  on  the  ground  that  evidence  was  admitted  which  ought 
not  to  have  been;  and  we  learn  from  the  report  that  this  evidence 
related  to  the  value  of  other  real  estate,  excepting  manufacturing 
establishments,  situated  in  various  parts  of  the  city  of  Manchester; 
and  this  is  the  first  question  of  law  presented.  Is  the  court  to  re- 
ject this  whole  report,  or  any  part  of  it,  because  such  evidence  was 
admitted?  The  objection  in  this  form  is  not  that  the  committee 
have  reported  facts  which  they  ought  not  to  have  reported,  but  that 
they  have  admitted  evidence  which  they  ought  not  to  have  admit- 
ted; and  evidence  of  such  a  character  as  that  having  been  received, 
there  would  be  danger  that  it  would  improperly  influence  the  minds 
of  the  committee,  and  so  make  their  report  worthless  in  regard  to 
the  matters  which  they  were  required  to  investigate. 

Would  the  inquiry  into  the  value  of  real  estate  in  different  parts 
of  the  city,  whether  similar  or  not  to  the  land  and  buildings  of  the 
petitioners,  exercise  such  a  disturbing  influence  on  the  minds  of 
the  committee  as  to  destroy  the  value  of  the  report  as  to  those  mat- 
ters which  they  were  directed  to  report  upon?  I  cannot  see  that  it 
would.  The  petition  makes  two  classes  of  property — land  and  build- 
ings, and  factories  and  machinery.  I  suppose  a  factory  is  a  build- 
ing, but  I  understand  from  the  petition  there  are  other  buildings 
and  land,  whether  used  for  boarding-houses  or  storage  or  cultiva- 
tion, which  are  different  from  factories,  and  perhaps  subject  to  dif- 
ferent considerations.  I  am  quite  unable  to  see,  as  matter  of  law, 
that  the  land  and  buildings  of  the  petitioners  are  not  similar  to  the 
other  lands  and  buildings  examined  by  the  committee;  but  I  am 


MANCHESTER  MILLS  V.  MANCHESTER.  633 

quite  ready  to  believe,  as  a  matter  of  fact,  when  the  committee  say, 
as  I  understand  they  do  substantially,  that  they  have  inquired  into 
the  value  of  similar  real  estate,  that  this  is  true,  and  that  the  com- 
mittee justly  instituted  comparisons  between  the  appraisal  of  the 
land  and  buildings  of  the  petitioners  and  other  lands  and  build- 
ings in  different  parts  of  the  city,  even  if  it  were  true  that  some  of 
the  "lands  and  buildings"  examined  were  not  exactly  like  the  "land 
and  buildings"  of  the  petitioners.  I  can  therefore  find  nothing,  a.s 
matter  of  law,  to  complain  of  in  this  proceeding;  and  I  think  it 
would  be  useful  for  the  circuit  court,  in  determining  the  matter  of 
fact  which  it  has  before  it,  to  consider  and  weigh  this  part  of  the 
report. 

It  appears  to  me  that  the  matters  on  which  the  committee  were 
directed  to  report  do  not  cover  the  whole  ground.  The  allegation 
in  the  petition  is,  that  the  property  of  the  petitioners  is  appraised 
too  high,  according  to  the  valuation  of  other  property.  The  petition 
does  not  say,  as  it  appears  from  the  printed  case,  that  the  appraisal 
is  too  high  according  to  the  valuation  of  other  similar  property,  but 
it  is  too  high  according  to  the  valuation  of  other  property. 

On  what  possible  ground  could  a  board  of  assessors  be  justified  in 
taxing  the  property  of  manufacturing  corporations,  and  appraising 
it  at  seven  tenths  of  its  true  value,  and  real  estate  at  one  half  of 
its  true  value?  I  hold  that,  as  matter  of  law,  the  court,  in  order 
to  do  what  justice  requires,  ought  to  ascertain  the  value  of  this 
property  according  to  the  valuation  of  other  property.  If  it  be 
true  that  some  property  is  intentionally  appraised  at  seven  tenth? 
of  its  true  value,  and  other  property  at  one  half  of  its  real  value, 
and  still  other  property  at  a  different  rate,  the  property  of  these 
petitioners  ought  to  be  appraised  at  what  would  be  a  fair  average 
rate. 

If  it  turns  out,  on  examination,  that  there  is  a  settled  usage  in 
regard  to  this  matter,  and  that  the  assessors  of  the  city  of  Manches- 
ter deliberately,  and  as  a  rule,  appraise  property  at  less  than  its 
true  value,  then,  as  matter  of  law,  I  hold  that  this  property  ought 
to  be  appraised  in  the  same  way;  and  if  it  be  true  that  by  accident 
or  mistake  or  erroneous  judgments  the  property  of  these  petitioners 
has  been  appraised  at  a  higher  rate  than  other  property,  then  I 
think  that,  as  matter  of  law,  it  is  just  that  the  tax  should  be  re- 
duced. Whether  the  report  furnishes  to  the  circuit  court  all  the 
needed  information,  is  not  matter  of  law,  but  matter  of  fact,  to  be 
determined  by  that  court. 


634  REMEDIES  FOR  WRONGFUL  ACTION. 

The  circuit  court  is  the  trier  of  the  facts.  If  on  the  evidence 
already  furnished  it  finds  itself  desiring  further  information,  it  can 
say  so,  and  either  recommit  the  case,  or  perhaps  hear  evidence  itself. 
But  in  the  end  the  question  should  be,  whether  the  property  of  the 
petitioners  is  rated  too  high  according  to  the  valuation  of  other 

property. 

Motion  denied. 

See  also  Supervisors  v.  C,  B.  &  Q.  R.  R.  Co.,  44  111.  229,  supra. 


PASSAVANT  V.  UNITED  STATES. 

Supreme  Court  of  the  United  States.    October,  1892. 
148  United  States,  214. 

Mr.  Justice  JACKSON  delivered  the  opinion  of  the  court. 

The  principal  question  presented  by  the  record  in  this  case  is 
whether,  under  the  Customs  Administrative  act  of  June  10,  1890, 
26  Stat.  c.  407,  p.  131,  the  Circuit  Courts  of  the  United  States 
have  any  jurisdiction  to  entertain  an  appeal  by  importers  from  a  de- 
cision of  the  board  of  general  appraisers,  as  to  the  dutiable  value  of 
imported  merchandise;  in  other  words,  whether  the  Circuit  Courts 
of  the  United  States  have,  under  the  provisions  of  said  act,  any  au- 
thority or  jurisdiction,  on  the  application  of  dissatisfied  importers, 
to  review  and  reverse  a  decision  of  a  board  of  general  appraisers,  as- 
certaining and  fixing  the  dutiable  value  of  imported  goods,  when 
such  board  has  acted  in  pursuance  of  law,  and  without  fraud,  or 
other  misconduct,  from  which  bad  faith  could  be  implied. 

The  material  facts  of  the  case  on  which  this  question  arises  are 
the  following:  In  November,  1890,  and  July,  1891,  the  appellants, 
Passavant  &  Co.,  imported  into  New  York  from  France  gloves  of 
different  classes  or  grades,  which  were  entered  by  the  importers  at 
certain  valuations.  The  collector  of  the  port  of  New  York,  under 
the  authority  conferred  by  section  10  of  said  administrative  act, 
caused  the  imported  goods  to  be  appraised,  and  upon  such  appraisal 
their  value  was  advanced  or  increased  by  the  appraiser  to  an  amount 
exceeding  by  more  than  10  per  cent  the  value  thereof  as  declared  by 
the  importers  upon  entry.  The  importers  being  dissatisfied  with 
this  advanced  valuation,  a  reappraisement  was  made  by  one  of  the 
general  appraisers  and  on  further  objection  by  the  importers  to 
this  valuation,  the  matter  was  sent  to  the  board  of  general  .apprais- 


PASSAVA-NT  V.  UNITED  STATES.        *& 

ere,  under  and  in  accordance  with  the  provisions  of  section  13  of 
the  Customs  Administrative  Act.  This  board  after  due  notice,  and 
examination  of  the  question  submitted,  sustained  the  increased  val- 
uation of  the  merchandise.  Thereupon  the  collector  of  the  port 
levied  and  assessed  upon  the  imported  goods  a  duty  of  fifty  per  cent 
ad  valorem,  that  being  the  rate  of  duty  on  the  gloves  under  para- 
graph 458  of  the  tariff  act  of  October  1,  1890,  and  in  addition 
thereto  a  further  sum  equal  to  two  (2)  per  cent  of  the  total  ap- 
praised value  for  each  1  per  cent  that  such  appraised  value  ex- 
ceeded the  value  declared  in  the  entry,  under  and  by  virtue  of  sec- 
tion ?  of  said  act  of  June  10,  1890. 

•  ••••«  •••• 

The  importers  duly  served  upon  the  collector  a  protest  against  his 
appraisement  of  duty  for  any  and  all  excess  above  50  per  cent  ad 
valorem,  and  upon  any  greater  value  than  the  declared  or  entered 
value,  for  the  alleged  reasons  that  no  legal  reappraisement  had  been 
made;  that  the  board  of  appraisers  had  declined  to  receive  or  en- 
tertain evidence  offered  by  them  as  to  the  true  market  value  of  the 
merchandise;  that  the  board  had  determined  matters  upon  esti- 
mates or  values  furnished  by  agents  of  the  Treasury;  that  evidence 
of  persons  who  were  not  experts,  and  had  no  personal  knowledge  of 
the  value  of  gloves  in  the  markets  of  France,  had  been  taken  and 
acted  on;  that  the  importers  were  given  no  opportunity  to  contro- 
vert evidence  against  them;  that  the  original  invoice  was  correct; 
that  the  duties  should  not  be  assessed  upon  any  greater  amount, 
and  that  the  action  of  the  board  was  in  all  respects  illegal.  The 
collector  duly  transmitted  this  protest,  with  the  papers  in  the  case, 
to  the  board  of  general  appraisers,  who  adhered  to  the  increased  val- 
uation, affirmed  the  action  of  the  collector,  and  held  that  the  de- 
cision of  the  board  as  to  such  valuation  was  final  and  conclusive 
under  section  13  of  said  act  of  June  10,  1890,  and  could  not  be 
impeached  or  reviewed  upon  protest.  Thereupon  and  within  due 
time  the  importers  filed  their  application  in  the  United  States  Cir- 
cuit Court  for  the  Southern  District  of  Xew  York  for  a  review  of 
the  case,  and  a  reversal  of  the  decision  of  the  board  of  appraisers 
and  the  action  of  the  collector  in  assessing  the  duties  on  the  basis  of 
the  increased  valuation  placed  upon  the  imported  merchandise,  and 
in  imposing  the  additional  duty  as  provided  by  said  section  7,  above 
referred  to. 

Upon  the  record  as  thu>  presented  the  Assistant  United  States 
Attorney  moved  the  court  to  dismiss  the  application  or  appeal  for 


636  EEMEDIES  FOR  WRONGFUL  ACTION. 

want  of  jurisdiction  to  entertain  the  same.  The  motion  was  sus- 
tained, and  the  Circuit  Court  thereupon  certified  to  this  court,  un- 
der the  fifth  section  of  the  act  of  March  3,  1891,  26  Stat.  c.  517, 
pp.  826,  827,  the  question  whether  said  court  had  any  jurisdiction 
to  enter  upon,  hear  and  decide  the  issues  sought  to  be  raised  by  tho 
allegations  of  the  petition,  which  are  specially  set  out  in  the  cer- 
tificate, but  need  not  be  here  enumerated,  as  they  are  embraced  in 
the  general  claims  or  propositions,  hereinafter  stated,  which  are  re- 
lied on  by  appellants  before  this  court. 

The  certificate  and  the  appeal,  therefore,  present  substantially 
the  same  question,  and  need  not,  for  that  reason,  be  separately  con- 
sidered. It  is  not  claimed  or  alleged  in  either  the  protests  made 
by  the  importers  as  to  the  appraisement  of  the  merchandise,  or  in 
their  application  to  the  Circuit  Court  to  review  and  reverse  the  de- 
cision of  the  board  of  general  appraisers,  that  there  was  any  wrong- 
ful or  erroneous  classification  of  the  gloves,  or  improper  rate  of  duty 
levied  thereon  under  the  tariff  act  of  October  1,  1890;  but  the  sub- 
stantial complaint  is  that  the  dutiable  value  of  the  imported  goods 
was  not  greater  than  the  value  mentioned  in  the  invoice  and  de- 
clared in  the  entry,  and  that  the  advanced  appraisement  was,  there- 
fore, erroneous,  and  also  that  the  merchandise  was  not  liable  for 
any  additional  or  penal  duty  such  as  the  collector  levied  and  im- 
posed thereon  under  section  7  of  the  act  of  June  10,  1890,  by  reason 
of  the  advanced  or  increased  valuation  placed  upon  the  same  by 
the  appraisers. 

Can  a  complaint  of  this  character  be  entertained  and  considered 
by  the  Circuit  Courts  of  the  United  States  in  a  case  like  the  pres- 
ent, where  the  board  of  general  appraisers  has,  upon  the  appeal  of 
the  importers,  ascertained  and  decided  that  the  imported  article 
actually  possesses  a  value  greater  than  that  stated  in  the  invoice  or 
entry?  Can  the  decision  of  the  board  on  the  question  of  the  duti- 
able value  of  the  merchandise  be  reviewed  by  the  courts  under  the 
provisions  of  section  15  of  the  Customs  Administrative  Act?  This 
is  the  real  question  presented,  and  we  are  clearly  of  the  opinion 
that  no  such  jurisdiction  is  conferred  by  this  statute  or  any  other 
provision  of  law.  It  is  provided  by  section  15  of  the  act  "that  if 
the  owner,  importer,  consignee  or  agent  of  any  imported  merchan- 
dise, or  the  collector  or  the  Secretary  of  the  Treasury,  shall  be  dis- 
satisfied with  the  decision  of  the  board  of  general  appraisers,  as  pro- 
vided for  in  section  14  of  this  act,  as  to  the  construction  of  the 
law  and  the  facts  respecting  the  classification,  they  or  either  of  them 


PASSAVAttT  V.  UNITED  STATES.  637 

may,  within  thirty  days  next  after  such  decision,  and  not  after- 
wards, apply  to  the  Circuit  Court  of  the  United  States  within  the 
district  in  which  the  matter  arises,  for  a  review  of  the  questions  of 
law  and  fact  involved  in  such  decision." 

It  was  said  by  Mr.  Justice  Blatchford,  speaking  for  the  court  in 
In  re  Fasseti,  142  U.  S.  479,  487,  that  "the  appeal  provided  for  in 
section  15  [of  said  act]  brings  up  for  review  in  court  only  the  de- 
cision of  the  board  of  general  appraisers  as  to  the  construction  of 
the  law,  and  the  facts  respecting  the  classification  of  imported  mer- 
chandise and  the  rate  of  duty  imposed  thereon  under  such  classifica- 
tion. It  does  not  bring  up  for  review  the  question  of  whether  an 
article  is  imported  merchandise  or  not,  nor  under  §  15  is  the  ascer- 
tainment of  that  fact  such  a  decision  as  is  provided  for.  The  de- 
cisions of  the  collector  from  which  appeals  are  provided  for  by  § 
14  are  only  decisions  as  to  'the  rate  and  amount'  of  duties  charged 
upon  imported  merchandise,  and  decisions  as  to  the  dutiable  costs 
and  charges  and  decisions  as  to  fees  and  exactions  of  whatever  char- 
acter." 

The  appeal  to  the  court  in  the  present  case  seeks  to  review  no 
such  decisions  as  are  thus  enumerated  as  falling  within  its  jurisdic- 
tion under  said  sections.  On  the  contrary,  the  decision  of  the  board 
of  general  appraisers  sought  to  be  reviewed  and  corrected  by  this 
application  to  the  court  relates  to  the  reappraisement  of  the  im- 
ported goods.  By  section  13  of  the  act  the  decision  of  the  board 
on  that  matter  is  declared  to  "be  final  and  conclusive  as  to  the 
dutiable  value  of  such  merchandise  against  all  parties  interested 
therein."  On  such  valuation  the  collector,  or  the  person  acting  as 
such,  is  required  to  ascertain,  fix  and  liquidate  the  rate  and  amount 
of  duties  to  be  paid  on  such  merchandise  and  the  dutiable  costs  and 
charges  thereon  according  to  law. 

It  was  certainly  competent  for  Congress  to  create  this  board  of 
general  appraisers,  called  "legislative  referees"  in  an  early  case  in 
this  court,  (Rankin  v.'Hoyt,  4  How.  327,  335.)  and  not  only  in- 
vest them  with  authority  to  examine  and  decide  upon  the  valuation 
of  imported  goods,  when  that  question  was  properly  submitted  to 
them,  but  to  declare  that  their  decision  "shall  be  final  and  con- 
clusive as  to  the  dutiable  value  of  such  merchandise  against  all  par- 
ties interested  therein." 

In  Hilton  et  al  v.  Merritt,  110  U.  S.  97,  it  was  held  that  the 
valuation  of  merchandise  made  by  customs  officers,  under  the  stat- 
utes, for  the  purpose  of  levying  duties  thereon,  was  conclusive  on 
the  importer,  in  the  absence  of  fraud  on  the  part  of  the  officers.  In 


638  REMEDIES  FOR  WRONGFUL  ACTION. 

this  case  several  sections  of  the  Revised  Statutes  of  the  United 
States;  relating  to  customs  duties,  were  referred  to,  among  them 
being  section  2930,  which  prescribed  the  method  of  appraising  im- 
ported merchandise,  and  provided  that  "the  appraisement  thus  de- 
termined shall  be  final  and  deemed  to  be  the  true  value,  and  the 
duties  shall  be  levied  thereon  accordingly."  Under  that  provision 
this  court  held  that  the  valuation  of  imported  merchandise  made 
by  the  designated  officials  or  appraisers  was,  in  the  absence  of  fraud 
on  the  part  of  such  appraisers,  conclusive  on  the  importer.  The 
same  rule  was  reasserted  in  the  recent  case  of  Earnshaw  v.  United 
States,  146  U.  S.  60,  in  which  it  was  held  that  a  reappraisement  of 
imported  merchandise  under  the  provisions  of  section  2930,  Revised 
Statutes,  when  properly  conducted,  was  binding.  The  earlier  de- 
cisions of  this  court  cited  and  referred  to  in  Hilton  v.  Merritt  and 
Earnshaw  v.  United  States,  established  the  same  general  rule.  The 
provisions  of  the  Customs  Administrative  Act  of  June  10,  1890,  as 
to  the  finality  arid  collusiveness  of  the  decision  of  the  board  of 
general  appraisers  as  to  the  valuation  of  imported  merchandise, 
when  that  question  was  regularly  submitted  to  and  examined  by 
them,  is  expressed  in  clearer  and  more  emphatic  terms  than  in  for- 
mer statutes.  The  language  is  so  explicit  as  to  leave  no  room  for 
construction.  In  the  tariff  legislation  of  the  government,  congress 
has  generally  adopted  means  and  methods  for  a  speedy  and  equita- 
ble adjustment  of  the  question  as  to  the  market  value  of  imported 
articles,  without  allowing  an  appeal  to  the  courts  to  review  the  de- 
cision reached.  If  dissatisfied  importers,  after  exhausting  the  rem- 
edies provided  by  the  statute  to  ascertain  and  determine  the  fair 
dutiable  value  of  imported  merchandise,  could  apply  to  the  courts 
to  have  a  review  of  that  subject,  the  prompt  and  regular  collection 
of  the  government's  revenues  would  be  seriously  obstructed  and  in- 
terfered with.  The  statute  authorizes  no  such  proceeding,  and  the 
Circuit  Court  can  exercise  no  such  jurisdiction. 

The  appraised  value  of  the  merchandise  having  been  conclusively 
ascertained  in  the  manner  provided  by  law,  and  being  found  to  ex- 
ceed by  more  than  ten  per  centum  the  value  declared  in  the  entry, 
the  collector,  as  a  matter  of  mere  computation,  under  the  direction 
and  authority  of  section  7  of  said  act,  properly  levied  and  collected, 
in  addition  to  the  ad  valorem  duty  imposed  by  law  on  such  mer- 
chandise, a  further  sum  equal  to  two  per  centum  of  the  total  ap- 
praised value  for  each  one  per  centum  that  such  appraised  value 
exceeded  the  value  declared  in  the  entry. 

Section  7  of  said  act  is  substantially  similar  to  section  8  of  tho 


PASSAVANT  V.  UNITED  STATES.  639 

act  of  Congress  passed  on  the  30th  of  July,  1846,  9  Stat.  42,  43, 
c.  74,  which  declared  that,  if  the  appraised  value  of  imports  which 
have  actually  been  purchased  should  exceed  by  ten  per  centum  or 
more  the  value  declared  on  the  entry,  then,  in  addition  to  the  duties 
imposed  by  law  on  the  same,  there  should  be  levied,  collected  and 
paid  a  duty  of  20  per  centum  ad  valorem  on  such  appraised  value. 
In  Sampson  v.  Peaslee,  20  How.  571,  that  provision  was  sustained 
and  enforced,  except  as  to  so  much  of  the  additional  duty  of  20  per 
centum  as  was  levied  upon  the  charges  and  commissions.  The  court 
there  say  that  the  ruling  of  the  lower  court,  in  confining  the  ad- 
ditional duty  to  the  appraised  value  of  the  imports,  was  the  correct 
interpretation  of  the  section. 

As  stated  by  Mr.  Justice  Campbell,  speaking  for  the  court,  in 
Bartlett  v.  Kane,  16  How.  263,  274,  such  additional  duties  "are  the 
compensation  for  a  violated  law,  and  are  designed  to  operate  as 
checks  and  restraints  upon  fraud."  They  are  designed  to  discourage 
undervaluation  upon  imported  merchandise  and  to  prevent  efforts 
to  escape  the  legal  rates  of  duty.  It  is  wholly  immaterial  whether 
they  are  called  additional  duties  or  penalties.  Congress  had  the 
power  to  impose  them  under  either  designation  or  character.  When 
the  dutiable  value  of  the  merchandise  is  fully  ascertained  and  is 
found  to  be  in  excess  of  the  value  declared  in  entry  by  more  than 
ten  per  centum  this  extra  duty  or  penalty  attaches,  and  the  col- 
lector is  directed  and  required  to  levy  and  collect  the  same  in  addi- 
tion to  the  ad  valorem  duty  provided  by  law. 

The  importers  in  this  case  cannot  be  heard  to  complain  of  this 
additional  duty  or  penalty,  which  was  a  legal  incident  to  the  find- 
ing of  a  dutiable  value  in  excess  of  the  entry  value  to  the  extent 
provided  by  the  statute.  They  had  full  notice  of  the  proceedings 
before  the  board  of  general  appraisers  upon  their  appeal  to  said 
board,  and  ample  opportunity  to  be  heard  on  the  question  of  tho 
market  value  of  the  imported  goods.  It  cannot,  therefore,  be  prop- 
erly said  that  they  have  been  subjected  to  penalties  without  notice 
or  an  opportunity  to  be  heard,  or  been  deprived  of  their  property 
without  due  process  of  law. 

The  judgment  of  the  Circuit  Court  dismissing  the  importers'  ap- 
peal to  that  court  for  want  of  jurisdiction  must,  therefore,  be 

Affirmed. 

Other  cases  in  this  collection  offering  instances  of  the  use  of  a  statutory 
method  of  appeal  in  tax  matters  are:  Commonwealth  v.  N.  Y.,  L.  E.  & 
W  Ry  Co.,  129  Pa.  St.  463 :  Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S. 
196;  Holt's  Appeal,  5  R.  I.  603;  Matter  of  McPherson,  104  N.  Y.  306; 
Matter  of  Swift.  137  N.  Y.  77;  Plummer  v.  Coler,  178  U.  S.  115;  Super- 
visors v.  C,  B.  &  Q.  Ry  Co.,  44  111.  229. 


640  REMEDIES  FOR  WRONGFUL  ACTION 

STATE  V.  CENTRAL  PACIFIC  R.  R.  CO. 

Supreme  Court  of  Nevada.     October,  1871. 
7  Nevada  99. 

By  the  Court,  LEWIS,  C.  J. : 

The  state  filed  a  complaint  in  the  usual  statutory  form,  against 
the  defendant  for  the  recovery  of  a  tax  due  and  unpaid  for  the  year 
1869.  The  defendant's  answer  was  demurred  to,  and  the  demurrer 
sustained.  A  supplemental  answer  was  also  filed,  and  afterwards 
an  amended  answer,  which  was  also  demurred  to,  and  the  demurrer 
sustained;  and  upon  refusal  to  amend,  judgment  was  rendered  for 
the  state,  from  which  defendant  appeals. 

The  grounds  taken  by  the  demurrer  are,  first,  that  the  facts  relied 
on  in  the  answer  are  not  alleged  with  sufficient  certainty;  and,  sec- 
ondly, admitting  the  pleading  to  be  sufficient  in  this  particular,  still 
the  facts  do  not  constitute  a  defense.  The  defense  pleaded  is  fraud 
in  the  assessment. 

Here,  then  is  an  allegation  that  the  fair  or  just  value  of  the 
road,  and  consequently  the  value  which  the  law  made  it  the  asses- 
sor's duty  to  place  upon  it,  was  six  thousand  dollars  per  mile.  But 
it  is  charged  that,  although  he  knew  this  to  be  its  fair  value,  yet 
contrary  to  his  official  judgment,  and  with  intent  to  defraud  the 
defendant,  he  fraudulently  and  craftily  set  down  and  assessed  the 
same  at  fifteen  thousand  dollars  a  mile.  Can  it  be  said  that  such 
facts  do  not  constitute  a  fraud  against  which  the  law  will  afford 
relief?  Can  it  be  maintained  that  if  the  taxpayer  has  inadvertently 
neglected  to  make  a  statement  as  required  by  the  assessor,  the  latter 
may  disregard  every  known  rule  for  estimating  the  value  of  prop- 
erty for  taxation,  and  impose  a  valuation  upon  it  which  he  knows 
to  be  exorbitant  and  unjust?  In  other  words,  is  the  taxpayer  under 
the  circumstances  completely  at  the  mercy  of  the  assessor?  Clearly 
not.  Every  man's  sense  of  justice  revolts  at  such  a  doctrine;  nor 
does  the  law  leave  the  citizen  so  utterly  without  protection.  The 
statute  imposes  a  penalty  for  a  failure  or  neglect  to  make  out  a 
statement,  which  is  the  deprivation  of  the  right  to  have  the  assess- 
ment made  by  the  assessor  equalized  by  the  board  constituted  for 
that  purpose.  Yet,  he  has  still  the  right  to  insist  that  the  officer, 
who  in  such  case  makes  the  assessment,  shall  discharge  his  duty 
honestly,  and  that  he  shall  not  knowingly  and  fraudulently  place 
an  excessive  valuation  on  his  property.  Xotwithstanding  the  failure 


STATE  V.  CENTRAL  PACIFIC  K.  K,  CO.  G41 

on  the  part  of  the  taxpayer  to  return  a  list  when  demanded,  it  is 
no  less  the  duty  of  the  assessor  to  be  governed  by  just  rules  and  the 
fairest  motives  in  making  the  assessment  of  his  property.  Such 
failure  to  comply  with  the  demand  of  the  officer  does  not  place  the 
citizen  in  the  place  of  an  outlaw,  beyond  the  reach  of  law  or  the 
protecting  arm  of  a  court  of  justice.  To  a  certain  extent,  it  ia 
true,  the  statute  expressly  deprives  him  of  a  right — that  of  obtain- 
ing relief  before  the  board  of  equalization.  This,  however,  is  the 
extent  of  the  penalty  for  the  neglect.  This  takes  from  him  the 
right  to  claim  any  reduction  in  the  valuation  of  his  property,  if  the 
assessment  has  been  honestly  made,  although  it  may  be  exorbitantly 
overestimated;  but  does  not  deprive  him  of  the  right  to  claim  relief 
in  a  court  of  justice  against  an  overestimate,  fraudulently  and  pur- 
posely placed  on  the  property — he  is  deprived  of  all  remedy  for  the 
errors  of  the  assessor,  but  not  for  his  fraudulent  misconduct.  The 
statute  designates  a  fraud  in  the  assessment  as  one  of  the  defenses 
which  may  be  made  to  an  action  for  taxes.  The  facts  here  alleged 
certainly  constitute  fraud  in  the  assessment,  and  consequently  the 
case  is  brought  directly  within  the  statute. 

It  must  be  borne  in  mind  that  we  are  simply  discussing  the  suffi- 
ciency of  a  pleading,  and  not  the  real  facts  in  this  case,  and  there- 
fore do  not  wish  to  be  understood  as  intimating  that  fraud  was 
really  practiced.  That  is  a  matter  which  must  be  established  by 
the  defendant,  if  it  exists  at  all,  at  the  trial  on  its  merits. 

The  demurrer  is  improperly  sustained.  The  order  and  judgment 
below  must  therefore  be  reversed. 

By  GARBER,  J. :     I  dissent. 

Other  cases  in  this  collection  upon  the  power  of  courts  in  collateral  pro- 
ceedings to  declare  an  assessment  void  are  Bell  v.  Pierce,  51  N.  Y.  12; 
Boreland  v.  Boston,  132  Mass.  S9;  County  Commissioners,  etc.,  v.  Union 
Mining  Co.,  61  M'd.  547;  Felsenthal  v.  Johnson,  104  Illinois,  21;  Hersey  v. 
Board,  37  Wis.  75,  and  Wygatt  v.  Washburn,  15  N.  Y.  316;  Palmer  v. 
McMahon,  133  U.  S.  660,  supra. 


(M2  KEMEDIES  FOR  WRONGFUL  ACTION. 

III.     EQUITABLE  EEMEDIES   (INJUNCTION). 
DOWS  V.  CITY  OF  CHICAGO. 

Supreme  Court  of  the  United  States.    December,  1870. 
11  Watt.  108. 

Appeals  from  decrees  of  the  Circuit  Court  of  the  United  States 
for  the  Northern  District  of  Illinois  in  two  suits;  one  original,  the 
other  a  cross  suit. 

A  demurrer  was  interposed  to  the  bills,  original  and  cross.  The 
Circuit  Court  sustained  the  demurrers  to  both,  and  the  complain- 
ants in  the  two  cases  electing  to  abide  by  their  bills,  the  court  en- 
tered decrees  dismissing  the  bills.  From  these  decrees  appeals  were 
taken. 

Mr.  Justice  FIELD  delivered  the  opinion  of  the  court. 

According  to  the  view  we  take  of  this  case,  it  is  unnecessary  to 
consider  the  force  of  any  of  the  objections  urged  by  the  appellants 
to  the  decrees  rendered.  Assuming  the  tax  to  be  illegal  and  void, 
we  do  not  think  any  ground  is  presented  by  the  bill  justifying  the 
interposition  of  a  court  of  equity  to  enjoin  its  collection.  The 
illegality  of  the  tax  and  the  threatened  sale  of  the  shares  for  its 
payment  constitute  of  themselves  alone  no  ground  for  such  inter- 
position. There  must  be  some  special  circumstances  attending  a 
threatened  injury  of  this  kind,  distinguishing  it  from  a  common 
trespass,  and  bringing  the  case  under  some  recognized  head  of 
equity  jurisdiction  before  the  preventive  remedy  of  injunction  can 
be  invoked.  It  is  upon  taxation  that  the  several  States  chiefly  rely 
to  obtain  the  means  to  carry  on  their  respective  governments,  and 
it  is  of  the  utmost  importance  to  all  of  them  that  the  modes  adopted 
to  enforce  the  taxes  levied  should  be  interfered  with  as  little  as  pos- 
sible. Any  delay  in  the  proceedings  of  the  officers,  upon  whom  the 
duty  is  devolved  of  collecting  the  taxes,  ma}  derange  the  operations 
of  government,  and  thereby  cause  serious  detriment  to  the  public. 

No  court  of  equity,  therefore,  will  allow  its  injunction  to  issue  to 
restrain  their  action,  except  where  it  may  be  necessary  to  protect 
the  rights  of  the  citizen  whose  property  is  taxed,  and  he  has  no 
adequate  remedy  by  the  ordinary  processes  of  the  law.  It  must 
appear  that  the  enforcement  of  the  tax  would  lead  to  a  multiplicity 
of  suits,  or  produce  irreparable  injury,  or  where  the  property  is 
real  estate,  throw  a  cloud  upon  the  title  of  the  complainant,  before 


DOWS  V.  CITY  OF  CHICAGO.  643 

the  aid  of  a  court  of  equity  can  be  invoked.  In  the  cases  where 
equity  has  interfered,  in  the  absence  of  these  circumstances,  it  will 
be  found,  upon  examination,  that  the  question  of  jurisdiction  was 
not  raised,  or  was  waived. 

our  attention  has  not  been  called  to  any  well  con- 
sidered case  where  a  court  of  equity  has  interfered  by  injunction 
after  its  jurisdiction  was  questioned,  except  upon  some  one  of  the 
special  circumstances  mentioned. 

The  Supreme  Court  of  Illinois  is  equally  clear  upon  this  ques- 
tion. In  the  case  of  Cook  County  v.  The  Chicago,  Burlington,  and 
Quincy  Railroad  Company,  (35  111.  465)  the  subject  was  considered, 
and  the  court  said  that  it  had  been  unable  to  find  any  decision,  in 
its  previous  adjudications,  asserting  a  right  to  bring  a  bill  to  re- 
strain the  collection  of  a  tax  illegally  assessed,  without  regard  to 
special  circumstances.  It  concludes  an  examination  of  its  former 
decisions  by  stating,  that  while  it  was  considered  settled  that  a  court 
of  equity  would  never  entertain  a  bill  to  restrain  the  collection  of  a 
tax,  except  in  cases  where  the  tax  was  unauthorized  by  law,  or 
where  it  was  assessed  upon  property  not  subject  to  taxation,  it  had 
never  held  that  jurisdiction  would  be  taken  in  these  excepted  cases 
without  special  circumstances,  showing  that  the  collection  of  taxes 
would  be  likely  to  produce  irreparable  injury,  or  cause  a  multi- 
plicity of  suits. 

Upon  principle  this  must  be  the  case.  The  equitable  powers  of 
the  court  can  only  be  invoked  by  the  presentation  of  a  case  of  equi- 
table cognizance.  There  can  be  no  such  case,  at  least  in  the  Fed- 
eral courts,  where  there  is  a  plain  and  adequate  remedy  at  law. 
And  except  where  the  special  circumstances  which  we  have  men- 
tioned exist,  the  party  of  .whom  an  illegal  tax  is  collected  has  ordi- 
narily ample  remedy,  either  by  action  against  the  officer  making  the 
collection  or  the  body  to  whom  the  tax  is  paid.  Here  such  remedy 
existed.  If  the  tax  was  illegal,  the  plaintiff  protesting  against  its 
enforcement  might  have  had  his  action,  after  it  was  paid,  against 
the  officer  or  the  city  to  recover  back  the  money,  or  he  might  have 
prosecuted  either  for  his  damages.  No  irreparable  injurj  would" 
have  followed  to  him  from  its  collection.  Nor  would  he  have  been 
compelled  to  resort  to  a  multiplicity  of  suits  to  determine  his  rights. 
His  entire  claim  might  have  been  embraced  in  a  single  action. 

We  see  no  ground  for  the     interposition    of    a    court  of  equity 


644  REMEDIES  FOR  WRONGFUL  ACTION. 

which  would  not  equally  justify  such  interference  in  any  case  of 
threatened  invasion  of  real  or  personal  property. 

The  cross-bill  filed  by  the  bank  presents  different  features.  That 
institution  insists  that  if  it  paid  the  tax  levied  upon  the  shares  of 
all  its  numerous  stockholders  out  of  the  dividends  upon  their  share.- 
in  its  hands,  which  it  is  required  to  do  by  the  law  of  the  State,  or 
if  the  shares  were  sold,  it  would  be  subjected  to  a  multiplicity  of 
suits  by  the  shareholders,  and  were  it  an  original  bill  the  jurisdic- 
tion of  the  court  might  be  sustained  on  that  ground.  But  as  a 
cross-bill  it  must  follow  the  fate  of  the  original  bill. 

Decrees  affirmed  in  both  suits. 


SAGE  AND  OTHERS,  RESPONDENTS,  V.  THE  TOWN  OF 
FIFIELD  AND  OTHERS,  APPELLANTS. 

Supreme  Court  of  Wisconsin.     January,  1887. 
68   Wisconsin  546. 

TAYLOR,  J.  The  appellants  insist  that  the  circuit  court  erred  in 
refusing  to  dissolve  the  temporary  injunction — (1)  because  the  com- 
plaint does  not  state  facts  which,  if  admitted  to  be  true,  would  jus- 
tify the  court  in  granting  the  relief  prayed  for  in  the  complaint, 
even  if  it  were  admitted  that  the  electors  of  said  town  had  no  au- 
thority to  vote  a  road  tax  upon  the  taxable  property  of  said  town 
exceeding  the  sum  of  $2,000; 

Under  the  law  requiring  the  highway  taxes  to  be  collected  in 
money  as  other  taxes  are  collected,  it  seems  to  us  very  clear  that 
the  duty  of  the  supervisors  as  to  making  out  warrants  for  the  col- 
lection of  such  taxes  is  clearly  abrogated;  and  if  any  duty  remains 
on  them  as  a  board  in  fixing  the  amount  of  taxes  to  be  raised  for 
that  purpose  in  the  town,  it  is  simply  their  duty  in  the  absence  of 
any  vote  of  the  electors  on  the  subject,  to  declare  the  number  of 
mills  which  shall  be  assessed  on  the  valuation  of  the  property  of 
said  town,  and  then  the  amount  is  to  be  carried  out  by  the  clerk 
upon  the  general  assessment  roll,  and  collected  with  the  other  taxes. 
In  the  case  at  bar  the  electors  have  indicated  that  all  the  highway 
taxes  in  said  town  for  the  year  shall  be  $5,000.  That  sum  the 
electors  had  the  power  to  vote,  with  or  without  the  approval  of  the 
board  of  supervisors,  as  the  law  gives  the  electors  the  right  to  direct 


SNYDER  V.  MARKS.  645 

the  supervisors  to  raise  fifteen  mills  on  the  dollar  valuation,  pro- 
vided such  fifteen  mills  does  not  exceed  the  sum  of  $2,000  and 
seven  mills  on  such  valuation.  In  this  case  the  $5,000  does  not  ex- 
ceed such  sum;  and  if  it  be  technically  necessary  that  the  board 
should,  after  the  vote  of  the  electors,  direct  so  many  mills  on  the 
valuation  to  be  raised  as  would  make  the  sum  of  the  $5,000  voted 
by  the  electors,  they  could  do  that  by  directing  that  amount  to  be 
apportioned  upon  the  assessment  roll;  and,  according  to  their  an- 
swer, that  was  all  that  was  intended  to  be  done  in  this  case. 

There  is  no  equity,  therefore,  in  staying  the  officers  of  the  town 
in  collecting  a  tax  which  the  law  clearly  authorizes,  even  though 
some  of  the  formalities  of  the  law  may  not  have  been  complied 
with. 

By  the  Court. — The  order  of  the  circuit  court  is  reversed,  and 
the  cause  is  remanded  with  directions  to  that  court  to  dissolve  the 
injunction. 


SNYDER  V.  MARKS. 

Supreme  Court  of  the  United  States.     October,  188S. 
109  United  States  189. 

This  suit  was  brought  in  a  State  court  of  Louisiana,  by  the  ap- 
pellant, a  tobacco  manufacturer,  against  the  appellee,  a  collector  of 
internal  revenue,  to  obtain  an  injunction  restraining  the  appellee 
from  seizing  and  selling  the  property  of  the  appellant  to  pay  two 
assessments  of  taxes  against  him,  made  by  the  commissioner  of  in- 
ternal revenue,  and  to  have  the  assessments  declared  void.  An  in- 
junction having  been  granted  ex  parte,  the  appellee  removed  the 
suit,  by  certiorari,  into  the  Circuit  Court  of  the  United  States  for 
the  District  of  Louisiana,  on  the  allegation  that  it  wap  brought  on 
account  of  acts  done  by  the  appellee,  as  such  collector,  under  the 
authority  of  the  internal  revenue  laws  of  the  United  States,  and  to 
enjoin  him,  in  his  official  capacity,  from  enforcing  the  payment  of 
assessments  made  against  the  appellant,  under  authority  of  such 
laws,  by  executing  warrants  of  distraint,  as  authorized  by  such 
laws. 

After  the  removal  of  the  suit  the  appellant,  under  an  order  to 
reform  his  pleading,  filed  a  bill  in  equity  in  the  circuit  court. 

The  appellee  demurred  to  the  bill  for  want  of  equity,  and  because 


646  REMEDIES  FOR  WRONGFUL  ACTION. 

no  suit  could  be  maintained  in  any  court  to  restrain  the  collection 
of  any  tax  of  the  United  States,  and  the  appellant  could  not  he  per- 
mitted in  this  suit  to  attack  the  validity  or  regularity  of  the  assess- 
ments or  restrain  the  execution  of  a  warrant  issued  thereunder. 
The  circuit  court  sustained  the  demurrer  and  dismissed  the  bill.  To 
review  its  decree  this  appeal  is  brought. 

Mr.  Justice  BLATCHFORD  delivered  the  opinion  of  the  court.  After 
reciting  the  facts  he  stated: 

The  sole  object  of  this  suit  is  to  restrain  the  collection  of  a  tax 
which  purports  to  have  been  assessed  under  the  internal  revenue  laws. 
A  decree  adjudging  the  tax  to  be  void  as  against  the  appellant  i> 
sought  for  only  as  preliminary  to  relief  by  injunction,  and  would 
be  futile  for  any  purpose  of  this  suit  unless  followed  by  an  injunc- 
tion. 

The  internal  revenue  act  of  July  13th,  1866,  c.  184,  14  Star. 
152,  provided,  §  19,  as  follows:  "No  suit  shall  be  maintained  in 
any  court  for  the  recovery  of  any  tax  alleged  to  have  been 
erroneously  or  illegally  assessed  or  collected,  until  appeal  shall  have 
been  duly  made  to  the  commissioner  of  internal  revenue  according 
to  the  provisions  of  law  in  that  regard,  and  the  regulations  of  the 
secretary  of  the  treasury,  established  in  pursuance  thereof,  and  a 
decision  of  said  commissioner  shall  be  had  thereon,  unless  such  suit 
shall  be  brought  within  six  months  from  the  time  of  said  decision,  or 
within  six  months  from  the  time  this  act  takes  effect:  Provided, 
That  if  said  decision  shall  be  delayed  more  than  six  months  from 
the  date  of  such  appeal,  then  said  suit  may  be  brought  at  any  time 
within  twelve  months  from  the  date  of  such  appeal."  By  §  10  of 
the  act  of  March  3d,  1867,  c.  169,  14  Stat.  475,  it  was  enacted 
that  §  19  of  the  said  act  of  1866  be  amended  "by  adding  the  fol- 
lowing thereto:"  "And  no  suit  for  the  purpose  of  restraining  the 
assessment  or  collection  of  tax  shall  be  maintained  in  any  court." 
In  the  Revised  Statutes  this  amendment  of  and  addition  to '§  19 
of  the  act  of  1866  is  made  a  section  by  itself,  §  3224,  separated 
from  that  of  which  it  is  an  amendment  and  to  which  it  is  an  addi- 
tion, and  reads  thus:  "No  suit  for  the  purpose  of  restraining  the 
assessment  or  collection  of  any  tax  shall  be  maintained  in  any 
court."  The  word  "any"  was  inserted  by  the  revisers.  This  enact- 
ment in  §  3224  has  a  no  more  restricted  meaning  than  it  had  when 
after  the  act  of  1867,  it  formed  a  part  of  §  19  of  the  act  of  1866, 
by  being  added  thereto.  The  first  part  of  §  19  related  to  a  suit  to 
recover  back  money  paid  for  a  "tax  alleged  to  have  been  erroneously 
or  illegally  assessed  or  collected,"  and  the  section,  after  thus  pro- 


SNYDER  V.  MARKS.  647 

viding  for  the  circumstances  under  which  a  suit  might  be  brought, 
proceeded,  when  amended,  to  say,  that  "no  suit  for  the  purpose  of 
restraining  the  assessment  or  collection  of  tax  shall  be  maintained 
in  any  court."  The  addition  of  1867  was  in  pari  materia  with  the 
previous  part  of  the  section  and  related  to  the  same  subject-matter. 
The  "tax''  spoken  of  in  the  first  part  of  the  section  was  called  a 
"tax"  sub  modo,  but  was  characterized  "as  a  "tax  alleged  to  have 
been  erroneously  or  illegally  assessed  or  collected."  Hence,  when, 
on  the  addition  to  the  section,  a  "tax"  was  spoken  of,  it  meant  that 
which  is  in  a  condition  to  be  collected  as  a  tax,  and  is  claimed  by 
the  proper  public  officers  to  be  a  tax,  although  on  the  other  side  it 
is  alleged  to  have  been  erroneously  or  illegally  assessed.  It  has 
no  other  meaning  in  §  3224.  There  is,  therefore,  no  force  in  thy 
suggestion  that  §  3224,  in  speaking  of  a  "tax/'  means  only  a  legal 
tax;  and  that  an  illegal  tax  is  not  a  tax,  and  so  does  not  fall 
within  the  inhibition  of  the  statute,  and  the  collection  of  it  may 
be  restrained. 

The  statute  clearly  applies  to  the  present  suit,  and  forbids  the 
granting  of  relief  by  injunction.  It  is  distinctly  alleged  in  the 
bill,  that  the  appellee  claims  that  the  appellant  owes  to  the  United 
States  the  amounts  assessed  for  taxes,  both  the  tax  assessed  against 
the  appellant  and  that  assessed  against  Irwin  &  Snyder.  The  bill 
also  shows  sufficiently  that  the  assessment  had  relation  to  the  busi- 
ness of  the  appellant  as  a  manufacturer  of  tobacco,  and  to  his  lia- 
bility to  tax,  under  the  internal  revenue  laws,  in  respect  to  such 
business.  The  instructions  of  the  internal  revenue  department  in 
regard  to  the  preparation  of  assessment  lists  provided,  that  where 
an  assessment  was  reported  against  a  manufacturer  of  tobacco  for 
having  removed  any  taxable  articles  from  his  manufactory  without 
the  use  of  the  proper  stamp,  or  for  not  having  duly  paid  such  tax 
by  stamp  at  the  time  and  in  the  manner  provided  by  law,  the  entry 
in  the  column  headed  "article  or  occupation"  should  be  "Stamp 
Tax.  Tob.,"  with  liberty  to  use  the  initials  "S.  T."  as  an  abbrevia- 
tion for  "stamp  tax."  The  instructions  stated  that  "Tob."  is  an 
abbreviation  for  "tobacco."  Resort  may  be  had  to  these  instruc- 
tions to  show  the  meaning  of  the  abbreviations  in  the  assessment 
list.  Read  by  the  light  of  the  instructions,  the  list  shows  a  tax 
which  the  appellant  might  be  liable  to  pay,  and  one  which  the  com- 
missioner had  general  jurisdiction  to  assess  against  him. 

The  inhibition  of  §  3224  applies  to  all  assessments  of  taxes,  made 
under  color  of  their  offices,  by  internal  revenue  officers  charged  with 
general  jurisdiction  of  the  subject  of  assessing  taxes  against  tobacco 


648  REMEDIES  FOR  WRONGFUL  ACTION". 

manufacturers.  The  remedy  of  a  suit  to  recover  back  the  tax  after 
it  is  paid  is  provided  by  statute,  and  a  suit  to  restrain  its  collection 
is  forbidden.  The  remedy  so  given  is  exclusive,  and  no  other  rem- 
edy can  be  substituted  for  it.  Such  has  been  the  current  of  de- 
cisions in  the  circuit  courts  of  the  United  States,  and  we  are  satis- 
fied it  is  a  correct  view  of  the  law.  Rowland  v.  Soule;  Deady,  413 ; 
Pullman  v.  Kinsinger,  2  Abbott  U.  S.  94;  Bobbins  v.  Freeland,  14 
Int.  Rev.  Rec.  28;  Delaware  E.  R.  Co.  v.  Pretty  man,  IT  id.  99; 
United  States  v.  Black,  11  Blatchford,  538,  543;  Kissinger  v. 
Bean,  7  Bissell,  60;  United  States  v.  Pacific  Railroad,  4  Dillon,  66, 
69;  Alkan  v.  Bean,  23  Int.  Rev.  Rec.  351;  Kensett  v.  Stivers,  18 
Blatchford,  397.  In  Cheatham  v.  United  States,  92  U.  S.  85,  88, 
and  again  in  State  Railroad  Tax  Cases,  92  U.  S.  575,  613,  it  was 
said  by  this  court,  that  the  system  prescribed  by  the  United  States 
in  regard  to  both  customs  duties  and  internal  revenue  taxes  of 
stringent  measures,  not  judicial,  to  collect  them,  with  appeals  to 
specific  tribunals,  and  suits  to  recover  back  moneys  illegally  exacted 
was  a  system  of  corrective  justice  intended  to  be  complete,  and  en- 
acted under  the  right  belonging  to  the  government  to  prescribe  the 
conditions  on  which  it  would  subject  itself  to  the  judgment  of  the 
courts  in  the  collection  of  its  revenues.  In  the  exercise  of  that 
right,  it  declares,  by  §  3224,  that  its  officers  shall  not  be  enjoined 
from  collecting  a  tax  claimed  to  have  been  unjustly  assessed,  when 
those  officers,  in  the  course  of  general  jurisdiction  over  the  subject 
matter  in  question,  have  made  the  assignment  and  claim  that  it  is 
valid. 

The  decree  of  the  circuit  court  is  affirmed. 

This  statute  does  not  prevent  an  injunction  by  a  stockholder  of  a  corporation 
to  restrain  the  corporation  from  paying  an  illegal  or  unconstitutional  tax. 
Pollock  v.  Farmers'  Loan  &  Trust  Co.,  157  U.  S.  429. 

Other  cases  in  this  collection  illustrative  of  the  use  of  the  injunction 
in  tax  matters  are :  Belo  v.  Commissioners,  82  N.  C.  415 ;  Brown  v.  Houston, 
114  U.  S.  622;  City  of  Newton  v.  Atchinson,  31  Kan.  151;  County  Com- 
missioner v.  Union  Mining  Co.,  61  M'd.,  547;  Cypress  Pond  Draining  Co.  v. 
Hooper,  2  Metcalfe  (Ky.)  350;  FelsenthaS  v.  Johnson,  104  111.  21;  Gilman 
v.  Sheboygan,  2  Black  (U.  S.)  510;  Hersey  v.  Board,  37  Wis.  75;  Home  of 
the  Friendless  v.  Rouse,  8  Wallace  (U.  S.)  430;  Kirtland  v.  Hotchkiss, 

100  U.  S.  491;  Lowell  v.  Boston,  111  Mass.  454;  McMillen  v.  Anderson,  95 
U.  S.  37;  New  Orleans  v.  Stempel,  175  U.  S.  309;  Pelton  v.  National  Bank, 

101  U.   S.  143;  Rees  v.  Watertown,  19  Wallace   107;   Savings,  etc.,  Society 
v.  Multnomah  Co.,  169  U.  S.  421;  Snell  v.  Fort  Dodge,  45  Iowa  564;  State 
Tonnage   Tax   Cases    (second   case),  12  Wallace    (U.   S.)    204;   Tappan  v. 
Merchants'  National  Bank,  19  Wallace  490;  Washington  Avenue,  69  Pa.  St 
352;  Youngblood  v.  Sexton,  32  Mich.  406. 


SNYDEB  V.  MARKS.  649 

Other  cases  of  equitable  relief  are  Albany  Brewing  Co.  v.  Meriden,  48 
Conn.  243,  and  Stater  v.  Maxwell,  6  Wallace  268,  both  cases  of  bills  to  set 
aside  a  lien. 


IV.    ACTIONS  AGAINST  TAX  OFFICERS. 

Cases  in  this  collection  illustrative  of  the  actions  which  may  be 
brought  against  tax  officers  are:  Brackett  v.  Vining,  49  Me.,  356; 
Gordon  v.  Comes,  47  X.  Y.  608;  Mygatt  v.  Washburn,  15  N.  Y. 
316;  Price  v.  Mott,  52  Pa.  St.  315;  Shaw  v.  Peckett,  26  Vt.  482; 
Sheldon  v.  Van  Buskirk,  2  X.  Y.  473;  Van  Voorhes  v.  Budd,  39 
Barbour  (N.  Y.)  479. 

V.    REPLEVIN. 

Cases  in  this  collection  illustrative  of  the  action  of  replevin  in  tax 
cases  are:  Carpenter  v.  Snelling,  97  Mass.  452;  and  Daniels  v.  Nel- 
son, 41  Vt.  161. 

VI.    HABEAS  CORPUS. 

Cases  in  this  collection  illustrative  of  the  use  of  the  habeas  corpus 
in  tax  cases  are:  Ex  parte  City  Council  of  Montgomery,  64  Ala. 
463  and  Commonwealth  v.  Byrne,  20  Grattan  (Va.)  165. 

VII.     ACTION  TO  RECOVER  POSSESSION    OF    PROPERTY    SOLD    FOR 
NON-PAYMENT  OF  TAXES. 

Cases  in  this  collection  illustrative  of  the  action  to  recover  prop- 
erty sold  for  non-payment  of  taxes  are:  Bennett  v.  Hunter,  9  Wal- 
lace (U.  S.)  326;  Bosworth  v.  Danzien,  25  Cal.  297;  Brown  v. 
Hays,  66  Pa.  St.  229;  Brown  v.  Veazie,  25  Me.  359;  Covington  v. 
Kentucky,  173  U.  S.  231;  Cruger  v.  Dougherty,  43  N.  Y.  107; 
Donald  v.  McKinnon,  17  Fla.  746;  King  v.  Mullins,  171  U.  S. 
404;  Smith  v.  Messer,  17  N.  H.  420;  Williams  v.  Peyton's  Lessee, 
4  Wheaton,  77 ;  Woodside  v.  Wilson,  32  Pa.  St.  52. 

VIII.     PROHIBITION. 

Cases  of  the  use  of  the  writ  of  prohibition  in  tax  matters  to  be 
found  in  this  collection  are:  People  v.  Board,  59  N.  Y.  92,  used 
here  to  prevent  the  revocation  of  a  tax  license,  and  Weston  v. 
Charleston,  2  Peters,  449,  to  restrain  levy  of  an  illegal  tax. 


INDEX 


[BETEBENCES  ABE  TO  PAGES.] 
ACTION— 

to  recover  property  sold  for  taxes,  649. 
APPOINTMENT,  POWER  OF— 

succession  of  one  taking  under,  may  be  taxed,  184. 
ARREST— 

for  non-payment  of  tax  proper,  497. 

even  when  decreed  by  administrative  officer,  499. 

ASSESSMENT,  334. 

by  Board  of  Equalization,  471. 
to  deceased  person  not  good,  429. 
description  of  land  in,  442. 
divison  of  parcel  in,  440. 
effect  of  fraud  on,  640. 

effect  of  mistake  in  description  of  land  on,  444. 
effect  on  of  omission  of  taxable  property,  461. 
effect  of  statement  of  tax-payer  on,  339. 
of  express  companies,  394. 
when  franchise  may  not  be  included,  452. 
hearing  necessary  to  valid,  179,  334. 
income  not  a  criterion  in  land  tax,  450. 
by  initials.  434. 
method  of  valuation,  447. 
mistake  in  name  of  owner,  433. 
must  be  made  by  proper  person,  337. 
a  necessary  prerequisite  to  legal  taxation,  334. 
not  made  when  succession  is  contingent,  343. 
once  made  may  not  be  changed,  347. 

penalties  for  failure  of  tax-payer  to  list  property,  318,  142. 
of  property  to  owner,  427. 
of  Pullman  Car  Companies,  389. 
remedies  against,  622. 
of  separate  parcels,  when  necessary,  436. 
statutory  review  of.  630. 
to  surname,  436. 
time  of  making,  345. 
unit  of  value  rule,  389,  394. 
to  unknown  owners,  432. 
use  of  tax  map  numbers,  444. 
without  jurisdiction  makes  assessors  liable,  345. 

651 


652  INDEX. 

[REFERENCES  ABB  TO  PAGES.] 

ASSESSORS— 

liability  of,  345. 

not  liable  for  mistake  when  having  jurisdiction,  366. 

AUCTION    SALES— 

of  imports,  state  taxation  of,  145. 
BANK  STOCK,  418. 
BENEFITS  AND  TAXATION,  18. 

BILLS   OF   LADING— 

foreign,  taxes  on,  taxes  on  exports,  178. 

BOARD   OF   EQUALZATION— 

powers  of.  465,  471. 
BOARD  OF  GENERAL  APPRAISERS— 

powers  of,  634. 
BUSINESS— 

taxes  on,  549. 

See  PRIVILEGES. 
CERT1ORARI,  622. 

what  may  be  reviewed  on,  622,  626. 
CHOSES  IN  ACTION— 

taxation  of;    see  MORTGAGES,  268. 
CITIZENS— 

corporations  are  not,  under  constitution,  196. 
CLASSIFICATION— 

not  violative  of  equal  protection  of  laws,  196. 
COLLECTION  OF  TAX,  474. 

by  imprisonment,  31. 

by  suit,  5,  7. 

COLLECTION  WARRANT.  477. 

COMMERCE — See  FOREIGN  COMMERCE;  see  INTERSTATE  COMMEBCB. 
CONSTITUTIONAL  LIMITATIONS— 

of  taxing  power,  56. 

direct  taxes  must  be  apportioned  among  states,  202. 

equality  and  uniformity,  282. 

purpose  of  tax  must  be  public,  231. 

resulting  from  theory  of  federal  government,  56. 

state  taxation  of  interstate  and  foreign  commerce,  98. 

tonnage  taxes,  165. 

taxes  must  be  uniform  throughout  United  States,  214. 
CONSTRUCTION  OF  TAX  LAWS,  307. 

CONTRACT— 

grant  to  municipal  corporation  of  power  to  tax  not  a,  38. 

taxes  not,  2. 
CORPORATE  STOCK— 

National  bank  stock,  418. 

taxable  when  corporations  are  taxed  as  well,  417. 

taxation  of,  410. 


INDEX.  663 

[REFERENCES  ARE  TO  PAGES.] 
CORPORATIONS— 

not  citizens  under  constitution,  196. 

domicil  of,  when  determined  by  charter,  361. 

foreign,  taxation  of,  375. 

foreign  engaged  in  interstate  commerce  not  taxable  by  states  except 
on  property,  401. 

names  of  in  assessment,  434. 

payment  by  of  taxes  on  holders  of  bonds  of,  89,  263,  371.  ' 

are  persons  under  constitution,  179,  189. 

shareholders  in  may  be  taxed  when  corporations  are  taxed  also,  417. 

taxation  of  franchises,  69,  123,  452,  460. 

what  are,  364. 

when  doing  business  in  the  state,  36S. 

where  taxed,  359. 
COURTS— 

may  not  levy  taxes,  23. 

control  of  over  power  to  tax,  20,  22. 
COURTS  AND  POWER  TO  TAX,  17. 
CURING  DEFECTS— 

in  tax  proceedings,  320. 

by  action  of  courts,  331. 

by  administrative  action,  328. 

by  legislative  action,  320,  326. 
DECEASED  PERSON— 

assessment  to,  429. 
DE  FACTO  OFFICERS,  304. 
DELEGATION  OF  POWER  TO  TAX,  27. 

DIRECT  TAXES— 

what  are,  202,  206. 
DISTRESS  AND  SALE,  474. 
DISTRICTS— 

for  taxes  fixed  by  legislature,  18. 
DOMICIL,  351. 

cannot  be  lost  before  new  one  is  obtained,  351. 

of  corporations,  359. 

how  determined,  354. 

of  married  women,  354. 
DRUMMERS— 

states  may  not  tax  interstate,  93. 

DUE  PROCESS  OF  LAW— 

prevents  making  tax  deeds  conclusive,  320. 

requires  opportunity  to  be  heard  on  assessment,  17t. 
ENFORCING  OFFICIAL  DUTY,  603. 
EQUAL  PROTECTION  OF  LAWS— 

is  assured  to  corporations,  189. 

doee  not  prevent  classification,  196. 


654  INDEX. 

[REFERENCES  ABE  TO  PAGES.] 
EQUALITY  AND  UNIFORMITY,  11. 

of  taxation  prevents  arbitrary  selection  of  tax-payers,  282. 

requires  taxation  of  all  property  in  district,  284. 

provision  for  applicable  only  to  taxes  on  property,  303. 

requires  uniformity  in  assessment,  293. 
EQUALIZATION,  465. 
EQUITABLE  CONVERSION,  272. 
EXEMPTION  FROM  TAXATION— 

how  construed,  302. 

power  of  administrative  officers  to  exempt,  300. 

not  a  contract,  43,  except  when  made  for  a  consideration,  45,  or  when 
contained  in  a  charter  of  a  private  corporation,  48,  but  not  when 
contained  in  a  charter  of  a  municipal  corporation,  51. 

power  of  legislature  to  exempt,  299. 

when  a  contract,  43. 

EXPORTS— 

taxes  on  unconstitutional,  173. 

taxes  on  foreign  bills  of  lading,  taxes  on,  173. 

what  are,  113. 
EXPRESS  COMPANIES— 

state  taxation  of,  110. 
FEDERAL  GOVERNMENT— 

bonds  of,  taxation  of  by  states,  64;  instrumentalities  of  may  not  be 
taxed  by  states,  56. 

may  not  tax  instrumentalities  of  state  governments,  60. 

may  not  tax  property  of  municipal  corporations,  89. 

may  not  tax  property  of  states,  89. 

property  of  not  taxable  by  states,  85. 

salaries  of  officers  of  may  not   be   taxed    by    states,  61;    effect  of 

theory  of  on  power  to  tax,  55. 
FOREIGN  COMMERCE— 

exports,  113. 

original  packages,  133. 

states  may  not  regulate,  162. 

what  are  original  packages,  150. 

state  taxation  of  auction  sales  of  imports,  145. 

state  taxation  of  imports,  133. 

state  taxation  of  receipts  from,  125. 
FORFEITURES,  482,  492. 
FOREIGN  CORPORATIONS— 

holders  of  stock  of,  taxable,  418. 

taxation  of,  375,  379. 
FRANCHISE  TAXES,  69,  126,  130. 
FRANCHISE— 

when  not  to  be  included  in  assessment,  452,  460. 
FRAUD  IN  LAW,  478. 


INDEX.  655 

[REFERENCES  ABE  TO  PAGES.] 
FREIGHT — 

Interstate  not  taxable  by  states,  98. 
HABEAS  CORPUS,  649. 
_  HEARING  ON  ASSESSMENT— 

must  be  given,  179. 
IMPORTS— 

what  are,  153. 

Se0  FOREIGN  COMMERCE. 
IMPRISONMENT— 

for  non-payment  of  taxes,  31. 
INHERITANCE  TAX— See  SUCCESSION  TAX.  . 
INJUNCTIONS— 

in  tax  matters,  172,  642. 

not  granted  against  federal  tax  officers,  645. 

when  courts  will  issue  in  tax  matters,  340. 

use  of  in  tax  matters,  447. 
"  INTERNAL  REVENUE  TAXES,  539. 
INTERSTATE  COMMERCE— 

corporations  engaged  in  may  be  taxed  by  states  for  right  to  do 
state  business,  110,  130. 

discrimination  against  products  of  other  states,  117. 

express  companies,  110. 

goods  coming*  from  one  state  into  another,  not  imports,  153. 

original  packages,  113. 

Pullman  Car  Companies,  108. 

may  be  regulated  only  by  Congress,  94. 
INTERSTATE  COMMERCE— 

states  may  not  tax,  93. 

state  taxation  of  railways,  98,  123. 

right  to  engage  in  not  taxable  by  states,  104. 

state  taxation  under  police  power,  120. 

state  taxation  of  railway  gross  receipts,  123. 

telegraph  companies,  104,  120,  130. 

what  is?  100. 
(  INTEREST— 

taxes  do  not  bear,  S. 
1  IN  TRANSITU— 

property  not  taxable  by  itateg,  98. 

|   JUDGMENTS— 

taxes  not,  2. 

|   JURISDICTION— 

property  to  be  taxed  must  be  within,  2S7. 
I  LAND— 

sale  of  must  be  fair.  509. 

sale  of  for  unpaid  taxes,  507. 

must  be  provided  by  statute,  507. 


656  INDEX. 

[REFERENCES  ABE  TO  PAGES.] 

LAWYERS— 

taxation  of,  555. 
LEGISLATURE— 

has  power  to  tax,  18. 

may  choose  tax  districts,  18. 

power  of  to  compel  levy  of  local  taxes,  29. 

power  of,  to  tax,  restrained  by  constitution,  29. 

power  of,  to  exempt  from  taxes,  299. 
LIABILITY— 

of  tax  officers,  649. 
LICENSES— 

taxation  of  state,  by  municipalities,  555. 

power  to  issue,  does  not  authorize  taxation,  543,  546,  548;    revoca- 
tion of,  562,  564. 

LIENS,  482,  489. 

over  against  bona  fide  purchasers,  482;    relate  back,  484. 
LISTING  OF  PERSONS — See  ASSESSMENT,  334. 
LOCAL  ASSESSMENTS  AND  TAXES,  13. 
LOCAL  ASSESSMENTS — See  SPECIAL  ASSESSMENT. 
LOCAL  TAXATION— 

local  districts  may  be  obliged  by  legislature  to  levy  taxes,  254. 

under  federal  government,  228. 
MANDAMUS— 

use  of  to  force  exercise  of  power  to  tax,  27. 

to  compel  exercise  of  power  to  tax,  40. 
MANUFACTURING  ESTABLISHMENTS— 

taxes  to  aid  improper,  231. 
METHOD  OF  VALUATION,  447. 
MONEY  HAD  AND  RECEIVED— 

action  for  to  recover  taxes  improperly  paid,  165. 
MORAL  OBLIGATION— 

satisfaction  of,  a  public  purpose  of  taxation,  243. 
MORTGAGES— 

taxation  of,  259. 

may  be  taxed  where  recorded,  259. 

may  be  taxed  where  the  papers  are  kept,  265. 

situs  of,  387. 

may  be  taxed  in  two  states  at  same  time,  268. 
MUNICIPAL  BONDS— 

federal  taxation  of  not  proper,  83. 

MUNICIPAL  CORPORATION— 

delegation  to,  of  power  to  tax,  30. 

grant  of  power  to  tax  not  a  contract,  38. 

may  levy  only  such  taxes  as  they  may  have  been  authorized  by 

legislature  to  levy,  33. 
may  levy  taxes  for  authorized  purposes,  34. 


INDEX.  657 

[REFERENCES  ARE  TO  PAGES.] 
MUNICIPAL  CORPORATION— Continued. 

mandamus  to  compel  exercise  of  power  to  tax  by,  40. 

property  of  may  not  be  taxed  by  federal  government,  89. 

must  levy  taxes  in  the  way  prescribed  by  law,  36. 
NATIONAL  BANK  STOCK,  418. 

may  not  be  taxed  more  than  other  moneyed  capital,  422,  426. 
NATURE  OF  TAXES.  1. 

NON-RESIDENT  HOLDERS  OF  CORPORATE  BONDS,   263. 
OFFICERS— 

federal,  salaries  of  may  not  be  taxed  by  states,  61. 

state,  salaries  of  may  not  be  taxed  by  federal  government,  61. 
OFFICIAL  ACTION— 

in  matters  of  taxation,  304. 

presumed  to  be  proper,  305. 

official  duty,  enforcement  of,  603. 
OCCUPATIONS— 

taxes  on,  31. 

See  BUSINESS,  PRIVILEGE. 
ORIGINAL  PACKAGES— 

imported  from  foreign  countries,  133. 

imported  from  other  states,  113. 

what  are,  150. 
OWNER— 

assessment  of  property  to,  427. 

PARCELS— 

assessment  of,  436. 
PENALTIES,  505. 

for  failure  of  taxpayer  to  make  statement,  318,  342. 
PERSONS— 

corporations  are,  under  constitution,  179,  189. 
POLICE  AND  TAXING  POWER,  529. 
POWER  TO  TAX— 

alienation  of,  43. 

belongs  to  state,  11. 

delegation  of  to  private  corporation,  27. 

to  municipal  corporation,  30. 

constitutional  limitations  of,  56. 

not  controlled!  by  courts,  20,  22. 

grant  of,  to  municipal  corporation,  not  a  contract,  38,  except  when 
necessary  to  protect  private  rights,  40. 

not  a  judicial  power,  17,  23. 

a  legislative  power,  11,  15. 

mandamus  to  compel  exercise  of,  27,  40. 

nature  of,  10. 

Dower  to  destroy,  21. 

unlimited,  20;    except  by  constitution,  11,  15. 
POWER  OF  APPORTIONING  TAXES,  15. 

41 


658  INDEX. 

[REFERENCES  ABE  TO 
PRIVATE  CORPORATION— 

delegation  of  power  to  tax  to,  27. 
PRIVATE  PURPOSE  OF  TAXATION— 

Improper,  231. 
PRIVILEGE— 

local  taxation  of,  543. 

what  is,  534,  537. 
PROGRESSIVE  TAXES— 

under  federal  government,  2.  4. 

proper,  196,  202. 

improper  in  some  states,  303. 
PROHIBITION,  649. 
PROPERTY— 

In  transitu  not  taxable,  98. 

may  not  be  taken  without  due  process  of  law,  8t. 
PUBLIC  PURPOSE— 

distinction  of  from  private  purpose,  239. 

satisfaction  of  moral  obligation,  a,  243. 
PULLMAN  CARS— 

situs  of,  389. 
PULLMAN  CAR  COMPANIES— 

state  taxation  of,  108. 
PURPOSE  OF  TAX— 

must  be  public,  230. 

relation  to  district  taxed,  251. 

RAILWAYS— 

state  taxation  of,  98,  100. 
taxation  in  aid  of,  proper,  2S8. 

RAILWAY  GROSS  RECEIPTS— 
state  taxation  of,  123. 

REASSESSMENT,  336,  347. 

REDEMPTION  OF  LAND,  514. 

may  be  made  by  agent  of  owner,  516. 
statutes  providing  liberally  construed,  514. 

REFUNDING  TAXES,  604. 

suits  for  may  be  brought  when  not  prohibited  by  statute,  €04. 
suits  for  may  be  brought  in  U.  S.  courts  of  claims,  619. 
suits  for  under  the  federal  law,  616. 
suits  for  when  may  be  brought,  611. 

REPLEVIN,  649. 

REVOCATION  OF  TAX  LICENSE,  562. 
SALARIES  OF  OFFICERS — See  OFFICERS. 
SALE  OF  LAND— 

for  unpaid  taxes,  507. 


INDEX.  659 

[REFERENCES  ARE  TO  PAGES.] 
SALE  OF  PROPERTY,  478. 

of  other  than  taxpayer,  478,  480. 
requirements  of  law  must  be  observed  in,  481. 

SALES— 

taxes  on,  proper,  176. 

SCHOOLS— 

under  private  management,  taxes  in  aid  of,  improper,  2X8. 

SITUS— 

of  choses  in  action,  379,  387. 

of  National  Bank  stock,  418. 

in  case  of  personalty  may  be  fixed  by  legislature,  201. 

of  Pullman  cars,  389. 

of  real  property,  272. 

SPECIAL  ASSESSMENT,  566. 

discretion  of  legislature,  566,  569,  573. 

methods  of  assessment,  577. 

foot  frontage  rule,  577,  581. 

under  police  power,  590. 

powers  of  local  authorities  to  impose,  687. 

not  proper  for  current  expenses,  592. 

necessity  for  a  matter  of  legislative  discretion,  514. 

regularity  of  proceedings  in,  595,  597,  600. 

STATES — 

may  not  tax  interstate  commerce,  93. 

may  not  tax  property  of  federal  government,  85. 

STATE  BONDS— 

federal  taxation  of  not  proper,  84. 

STATE  GOVERNMENT— 

instrumentalities  of  may  not  be  taxed  by  federal  government,  60. 
salaries  of  officers  of  may  not  be  taxed  by  federal  government,  61. 

STATE  PROPERTY— 

not  taxable  by  United  States,  89. 
SUCCESSION  TAX,  76. 

appraisement  under  final,  349. 

of  contingent  remainders,  345. 

not  payable  when  amount  of  succession  is  contingent,  S42. 

doctrine  of  equitable  conversion  as  applicable  to,  272. 

may  be  imposed  on  one  taking  under  power  of  appointment,  184. 

imposed  on  successions  to  property  out  of  state  where  decedent's 
domicil  was  in  state,  275. 

Imposed  on  successions  to  property  within  the  state,  278. 

may  be  progressive,  196T  202. 

progressive  under  federal  government,  214. 

progressive,  improper  in  some  states,  303. 

taxation  of  remaindermen,  289. 


660  INDEX. 

[REFERENCES  ARE  TO  PAGES.] 
SUITS— 

for  collection  of  taxes,  5,  7. 

to  recover  taxes  against  federal  government,  228. 

TANGIBLE  PERSONAL  PROPERTY— 
situs  of,  379. 

TAXATION— 

of  business  and  privilege,  529. 

of  corporate  stock,  410. 

for  private  purpose  improper,  231. 

TAXES— 

power  to  apportion,  15. 

not  contracts,  2. 

not  debts,  1. 

do  not  bear  interest,  3. 

not  judgments,  2. 

and  local  assessments,  13. 

on  occupations,  31;    see  BUSINESS;  see  PRIVILEGES. 

may  not  be  set  off,  1. 

nature  of,  1. 

suits  for  collection  of,  5,  7. 

TAX  DEED— 

not  conclusive  evidence  of  regularity  of  sale,  511. 

effect  of,  522. 

when,  passes  all  title  to  land  sold  for  taxes,  522,  525. 

may  not  be  made  conclusive  evidence,  320. 

may  be  made  prima  facie  evidence,  320. 

when  prima  facie  evidence  of  regularity  of  sale,  524. 

TAX  DOMICIL,  351. 

TAX  LAWS— 

construction  of,  307. 

when  directory,  314. 

when  mandatory,  310. 

not  retroactive,  316. 

may  be  made  retroactive,  318. 

TAXING  POWER — See  POWEB  TO  TAX. 

TELEGRAPH  COMPANIES— 

state  taxation  of,  104,  120,  130. 

TONNAGE  TAXES— 

states  may  not  levy,  165. 
UNIFORMITY— 

of  taxes  throughout  United  States.  214. 
UNIFORMITY  CLAUSE— 

does  not  affect  territory  appurtenant,  280. 
UNIT   OF  VALUE— 

rule,    389.   394. 


INDEX.  661 


[HEFERENCES  ARE  TO  PAQIS.] 
UNITED  STATES  BONDS— 

may  not  be  taxed  by  states,  56,  66. 

tax  on  succession  of,  75. 
UNKNOWN  OWNERS— 

assessment  to.  432. 

VALUATION  OF  PROPERTY— See  ASSESSMENT,  324. 
VESTED  RIGHTS— 

what  are,  184. 


•  *  v  y 


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